On each Adjustment Day the Index Components of the EQM International Ecommerce Index (XBUYXT) are equally weighted subject to the following liquidity adjustments:
Each Index Component is grouped into two liquidity pools based on the respective Index Component’s average daily value traded over the last 6 months. The first liquidity pool consists of the Index Components ranked in the top 80% of liquidity, while the second liquidity pool consists of the components ranked in the bottom 20% of liquidity.
Index Components in the bottom 20% liquidity pool will have their respective weightings reduced by 50%. The excess weight resulting from the 50% weight reduction is then equally distributed among the Index Components in the top 80% liquidity pool.
Country Weight Limitation
There is a maximum country of domicile weight of 25% per country. To achieve this country weight limitation, each Index Component’s country of domicile is identified, and the respective country weights summed. If any country has a combined weight greater than 25%, each Index Component that is domiciled in that country has its weight reduced on a pro rata basis, such that the country’s combined weight is reduced to 25%. The excess weight resulting from any country weight reduction is then redistributed equally to all the other companies in the top 80% liquidity pool.