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EAFE the MODERN INDEX STRATEGY Msci.Com Modern Index Strategy EAFE THE MODERN INDEX STRATEGY msci.com Modern index strategy MSCI indexing offers a modern, seamless and fully integrated approach to measuring the full equity opportunity set, with no gaps or overlaps. Modern Seamless Integrated 4 21 >900 Evolves to measure and Covers the full opportunity set Consistent methodology for regions countries constituents capture equity markets as they and all its segments, including every market exist today GICS® sectors EMEA Our indexes are built using All of MSCI’s indexes are created Where other providers use either an innovative maintenance using the Global Industry a long- or short-term liquidity methodology that provides Classification Standard (GICS®), measure to assess the eligibility superior balance between the an industry classification system of stocks for their indexes, APAC need for a stable index that developed by MSCI and S&P MSCI uses both, recognizing the is flexible enough to adjust Global, which provides a common differences in liquidity between quickly to a constantly changing framework to classify stocks. developed and emerging markets opportunity set. We provide timely They offer exhaustive coverage of and enhancing the investability and consistent treatment of the investable opportunity set with and replicability of our indexes. corporate events and synchronized non-overlapping size and MSCI puts strong emphasis on rebalancings, globally. style segmentation. investability and replicability of its indexes through the use of size and liquidity screens. 2 msci.com msci.com 3 MSCI delivers MSCI EAFE Index country allocation3 8.65% Switzerland the modern 8.82% Germany 11.10% France 16.94% United Kingdom 24.61% Japan index strategy 29.88% Other The MSCI EAFE Index is designed to represent the performance of large- and mid-cap securities across 21 developed markets in Europe, Australasia and the Far East,1 excluding the U.S. and Canada. As of December 2018, it had more than 900 constituents and covered approximately 85% of the free the index float-adjusted market capitalization in each country. The MSCI Global Equity Indexes are used and environmental, social, governance (ESG) matters by professional investors worldwide investing, the Modern Index Strategy enables The index is built using MSCI’s Global Investable Market Index (GIMI) methodology, which for investment analysis, performance clients to construct and monitor portfolios in is designed to take into account variations reflecting conditions across regions, market- measurement, asset allocation, hedging a cohesive and consistent manner, avoiding cap segments, sectors and styles. and the creation of a wide range of index benchmark misfits and uncompensated risks. derivatives, funds, ETFs and structured The MSCI EAFE suite of indexes offers 2 products. From market cap-weighted MSCI EAFE Index performance chart - gross returns (USD) standard, large-cap, mid-cap, small-cap and regional, country and sector indexes to investable-market (IMI) indexes.4 indexes based on strategies such as factor MSCI EAFE MSCI World 300 MSCI ACWI 266.28 266.21 Complete coverage of the investment opportunity 214.52 200 99% The Investable Market Opportunity Set P SMALL CAPMID CAP LARGE CAP 14%15% 70% MARKET CA 100 SEGMENTS (%) 0% 25% 50% 75% 100% 50 SEP 18 DEC 14 DEC 18 DEC 09 DEC 04 JUN 17 SEP 13 SEP 08 SEP 03 MAR 16 MAR 11 MAR 06 JUN 12 JUN 07 1 Markets covered: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, 3 Data as of December 31, 2018 Singapore, Spain, Sweden, Switzerland and the U.K. 4 They are: the MSCI EAFE Index, MSCI EAFE Investable Market Index (IMI), MSCI EAFE Large Cap Index, MSCI EAFE Mid Cap Index and MSCI 2 As of December 31, 2018 EAFE Small Cap Index 4 msci.com msci.com 5 Our building block approach Market Cap-Segments EAFE ex-Region or MSCI’s index Country Index EAFE IMI GICS® Sectors advantages and Region or country index benefits Styles Global coverage Research Product development With more than 200,000 indexes For more than 45 years, MSCI’s MSCI has created innovative to choose from, MSCI offers research-based indexes and indexes that can be utilized by extensive representation of the analytics have helped the world’s the passive investment industry. global equity opportunity set. leading institutional investors build and manage better portfolios. Consistent framework Replicability Performance measurement and All of MSCI’s Global Investable Minimum free-float requirements attribution Market Indexes offer a building- for eligibility and free float-adjusted block approach with a rules- capitalization weighting to reflect Industry-leading indexes for based, consistent methodology the size of each investment global mandates - with regional, designed to allow institutional opportunity and facilitate country, sector and other subsets investors to identify unintended replicability of the indexes. - are available for more-targeted bets, risks, gaps or overlaps. investment mandates. 6 msci.com msci.com 7 About MSCI Inc. MSCI is a leading provider of critical decision support tools and services for the global investment community. With over 45 years of expertise in research, data and technology, we power better investment decisions by enabling clients to understand and analyze key drivers of risk and return and confidently build more effective portfolios. We create industry-leading research-enhanced solutions that clients use to gain insight into and improve transparency across the investment process. To learn more, please visit www.msci.com. The information contained herein (the “Information”) may not be reproduced or disseminated in whole or in part without prior written permission from MSCI. The Information may not be used to verify or correct other data, to create indexes, risk models, or analytics, or in connection with issuing, offering, sponsoring, managing or marketing any securities, portfolios, financial products or other investment vehicles. Historical data and analysis should not be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. None of the Information or MSCI index or other product or service constitutes an offer to buy or sell, or a promotion or recommendation of, any security, financial instrument or product or trading strategy. Further, none of the Information or any MSCI index is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. The Information is provided “as is” and the user of the Information assumes the entire risk of any use it may make or permit to be made of the Information. NONE OF MSCI INC. OR ANY OF ITS SUBSIDIARIES OR ITS OR THEIR DIRECT OR INDIRECT SUPPLIERS OR ANY THIRD PARTY INVOLVED IN THE MAKING OR COMPILING OF THE INFORMATION (EACH, AN “MSCI PARTY”) MAKES ANY WARRANTIES OR REPRESENTATIONS AND, TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH MSCI PARTY HEREBY EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. WITHOUT LIMITING ANY OF THE FOREGOING AND TO THE MAXIMUM EXTENT PERMITTED BY LAW, IN NO EVENT SHALL ANY OF THE MSCI PARTIES HAVE ANY LIABILITY REGARDING ANY OF THE INFORMATION FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL (INCLUDING LOST PROFITS) OR ANY OTHER DAMAGES EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited. ©2019 MSCI Inc. All rights reserved | CBR0419.
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