MarketVector Indexes Announces Rule Changes for BFIVG, BAIPR, MVBRSV and a General Rule Change Concerning All Indexes

Component Eligibility:

Companies that fail to meet the minimum market cap and liquidity criteria for two review periods in a row are removed from the index. Previously deleted companies must meet the minimum market cap and liquidity criteria for two review periods in a row before re-entering the index. The minimum market cap and liquidity criteria are $150 million ($1billion for mobile network operators and REITs) and $250,000 3M ADV, respectively.

Component Eligibility:

Companies must meet MarketVector’s standard investability criteria detailed in Chapter 2.2.1 of the index guide.

Index Universe:

To be considered a 5G Communications company, the company’s business activity, products, or services must meet the technical standards for, are used in the development of, or are otherwise instrumental in the rollout of networks including:

• core carrier grade networking equipment including cellular antennas and routers,
• mobile network operators, satellite-based communications, enhanced mobile broadband chips,
• new radio technology, wireless network test and optimization equipment, cloud computing equipment,
• software defined networking or network functions virtualization, fiber optic cables, or 
• cell tower and/or data center real estate investment trusts.

Index Universe:

To be considered a 5G Communications company, the company’s business activity, products, or services must meet the technical standards for, are used in the development of, or are otherwise instrumental in the rollout of networks including:

• core carrier grade networking equipment including cellular antennas, routers and related semiconductor devices,
• mobile network operators, enhanced mobile broadband chips and smart phone manufacturers,
• new radio technology, wireless network test and optimization equipment, cloud computing equipment,
• software defined networking or network functions virtualization – including companies that derive 50% or more of their revenue from network/cloud analytics and monitoring platforms,
• Cell tower or data center real estate investment trusts ("REITs").

Selection Procedure:

The index covers 100% of the eligible universe.

Selection Procedure:

• Only the three largest investable REITs and the three largest investable mobile network operators are included in the eligible universe,
• all investable companies from other sub-themes are included in the eligible universe. 
• The index only includes 50 companies.
• The 40 largest members of the eligible index universe, by float-adjusted market cap, are automatically included. The next 10 companies are selected from the largest current index components ranked in the top 60.
• If fewer than 50 components have been selected, the next largest members of the eligible universe will be selected.

Weighting Scheme:

Companies are weighted by float-adjusted market cap within tiers as defined in the index guide.

Weighting Scheme:

Companies are weighted by float-adjusted market capitalization with a maximum weight of 5% (1.5% for REITs and mobile network operators). The 5%-50% rule as defined in Chapter 3.2.22 is also applied.

Review Schedule:

The index is reviewed semi-annually in June and December.

Review Schedule:

The index is reviewed semi-annually in March and September.

Index Universe:

For a company to be eligible for inclusion one or more of its featured products or services must be built on or feed into the machine learning process, or company management must comment or state in the company’s most recent annual filing that the related sub-theme is expected to contribute meaningfully to the company’s future growth:

• Actionable Intelligence, CRM andcustomer support automation; big data visualization and analytics and general CAD software
• enterprise infrastructure software, machine vision, manufacturing CAD software; embedded machine learning chips (GPUs, FPGAs, volatile memory devices, ASICs) 
• Internet services and E-commerce sites (full market cap must exceed USD 100 billion equivalent), 
• Processor semiconductors
• enterprise management and process automation software
• semiconductor design software and services.
• In general, the companies focused on the following are not included in the index: financial services or payments; social media and media; general analog and sensor semiconductors; cyber security.

Index Universe:

Companies that generate at least 50% of their revenue from the segment related to the following technologies where that segment either includes a stand alone AI product or where products and services are built on proprietary AI technology/platforms. These products or services must be part of revenue generating products as opposed to being used internally to enhance efficiencies or simply enhance product features such as the use of AI in generated suggested products on e-commerce sites.

• Generative AI and AI-based search.
• AI as a Service.
• Robotic process automation or automated workflow solutions.
• Application software including: CRM and marketing automation, actionable intelligence, and business productivity software providers.
• Other application software or services where the company generates at least 50% of its revenue from a dedicated AI product.

Semiconductor and Hardware companies that generate at least 50% of their revenue from: 

• A- an AI-specific technology hardware product or, 
• B- a segment or product line  where those products are used in AI or Machine Learning directly.
  • Graphic Processing Units, Central Processing Units, Field Programmable Gate Arrays, Application Specific Integrated Circuits, and Neural Processing Units.
  • Memory Devices (companies must have dedicated AI products to be included)
  • Semiconductor Design Software.
  • Vision or speech processing chips.
  • Quantum computers and related hardware.

Big Data companies that generate at least 50% of their revenue from the following products or services which incorporate or are used in artificial intelligence or machine learning applications/processes:

• database management,
• data platforms,
• big data analytics and visualization software, or
• data-related API management software.

Weighting Scheme:

The Fixed Tier Modified Float-Adjusted Market Cap weighting scheme as described in section 3.2.14 is applied to ensure diversification. Tier weights are defined as follows:

• Actionable Intelligence, CRM and customer support automation: 25% weight,
• Big data visualization and analytics and general CAD software: 20% weight,
• Enterprise infrastructure software, machine vision, manufacturing CAD software: 15% weight.
• Embedded machine learning chips (GPUs, FPGAs, volatile memory devices, ASICs): 10% weight, Internet services and E-commerce sites (full adjusted market cap must exceed USD 100 billion equivalent); processor semiconductors: 5% weight,
• Enterprise management and process automation software; semiconductor design software and services: 25% weight.

Additional parameters for the weighting scheme are

• Maximum Security Weight: 3%,
• Minimum weights: N/A,
• additional liquidity overlay (section 3.2.21): USD 200 million notional value.

Weighting Scheme:

The Modified Float-Adjusted Market Cap capping scheme as described in section 3.2.13 is applied to ensure diversification:

• Maximum weights: 5%
• Minimum weights: 3% for companies with more than 50% of revenue from a dedicated AI product
• Additional liquidity overlay (section 3.2.21): USD 200 million notional value.

Review Schedule:

The index is reviewed semi-annually in June and December

Review Schedule:

The index is reviewed semi-annually in March and September.