Base Date: December 31, 2007
No. of Components: 80
Minimum Market Cap: USD $100 million
Minimum Daily Avg. Liquidity: USD $2 million & 12-month aggregate volume of USD
Sector Limit: 25% (20 companies)
Geographic Exposure: Mainland China and Hong Kong
Rebalance Frequency: Semi-annual
Underlying Universe: Companies rated by MarketGrader listed in Shanghai and Shenzhen (A-Shares) and Hong Kong-listed stocks available through the 'Connect' program.
All index components must have scored above the median MarketGrader fundamental rating in 12 of the last 20 semi-annual rebalance periods and in four of the last six. This ensures consistency in fundamental quality, based on MarketGrader's GARP methodology. The top 80 grades among this pool is selected semi-annually to the index. At least half of all constituents must be listed on the Hong Kong Stock Exchange.
All index constituents are equally weighted every time the index is rebalanced. No weight modifications or adjustments are made to the portfolio between rebalance periods.
All index constituents must have a minimum total market cap of USD $100 million, a minimum 3-month average daily traded volume of USD $2 million and at least USD $50 million in aggregate 12-month trading volume.
No more than 25% of the index (20 companies) may belong to the same economic sector.
The index is rebalanced semi-annually, on the third Friday of March and September.
The MarketGrader China A-Shares + Hong Kong Connect Index measures the performance of the most fundamentally sound companies available to Mainland Chinese investors in the A-Shares market and through the HK-Connect program. As the HK Connect program expands, so will the pool of companies from which the index is constructed, ensuring only the best are selected. MarketGrader's goal is to identify the best creators of shareholder value across these two equity markets, regardless of listing venue, as the best prospects of long-term capital appreciation.
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