Dow Jones Islamic Market Indices Methodology

Dow Jones Islamic Market Indices Methodology S&P Dow Jones Indices: Methodology July 2015

Table of Contents Introduction 4 Shariah Screening 4 Highlights and Family 4 Eligibility Criteria and Construction 8 Country Inclusion Criteria 8 Country Classification 8 Dow Jones Islamic Market World and Related Sub-Indices 9 Dow Jones Islamic Market CHIME 11 Dow Jones Islamic Market China/Hong Kong Titans 30 12 Dow Jones Islamic Market International Titans 100 13 Dow Jones Islamic Market Malaysia Titans 25 14 Dow Jones Islamic Market Titans 100 15 Dow Jones Islamic Market BRC and Dow Jones Islamic Market BRIC Equal Weighted 17 Dow Jones Islamic Market Global Finance & Takaful and Dow Jones Islamic Market Global Finance & Takaful ex-saudi 18 Dow Jones Islamic Market Sustainability 19 Calculations 20 Approaches 20 S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 1

Maintenance 21 Broad-Market Indices 21 Blue-Chip Indices 21 Strategy and Thematic Indices 22 Corporate Actions 23 Currency of Calculation 23 Exchange Rate 23 Base Dates and History Availability 23 Investable Weight Factor (IWF) 23 Other Adjustments 23 Data 24 Total Return Indices 24 Governance 25 Committee 25 Shariah Expertise 25 The Shariah Supervisory Board 25 Policy 27 Announcements 27 Pro-forma Files 27 Holiday Schedule 27 Unscheduled Market Closures 28 Recalculation Policy 28 Real-Time Calculation 28 Dissemination 29 Tickers 29 FTP 29 Web site 29 Appendix I Shariah Compliance Screens 30 Sector-Based Screens 30 Accounting-Based Screens 31 Dividend Purification 31 S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 2

Appendix II Currency of Calculation 32 Currencies 32 Appendix III Base Dates and History Availability 33 Base Dates and History Availability 33 Appendix IV - Tickers 35 Bloomberg 35 Reuters 37 Appendix V Methodology Changes 39 S&P Dow Jones Indices Contact Information 40 Management 40 Product Management 40 Media Relations 40 Client Services 40 Disclaimer 41 S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 3

Introduction The Dow Jones Islamic Market family includes broad-market, blue-chip, strategy and thematic indices that have passed rules-based screens for Shariah compliance. The indices are one of the most visible and widely-used set of Shariahcompliant benchmarks in the world. To determine their eligibility for the indices, stocks are screened to ensure that they meet the standards set out in the published methodology. Companies must meet Shariah requirements for acceptable products, business activities, debt levels, and interest income and expenses. By screening stocks for consistency with Shariah law, the indices help to reduce research costs and compliance concerns Muslim investors would otherwise face in constructing Islamic investment portfolios. Shariah Screening S&P Dow Jones Indices has contracted with Ratings Intelligence Partners (RI) to provide the Shariah screens and filter the stocks based on these screens. Ratings Intelligence Partners is a London/Kuwait-based consulting company specializing in solutions for the global Islamic investment market. Its team consists of qualified Islamic researchers who work directly with a Shariah Supervisory Board. It is continually working with regional banks to create Shariah-compliant equity products and expand investment offerings. The Dow Jones Islamic Market Indices are overseen by a Shariah Supervisory Board, which is a board of Islamic scholars serving to interpret business issues and recommend actions related to business decisions for the indices. The members are: Shaykh Nizam Yaquby (Bahrain) Shaykh Dr. Mohd Daud Bakar (Malaysia) Shaykh Dr. Mohamed A. Elgari (Saudi Arabia) Shaykh Abdul Sattar Abu Ghuddah (Syria) Shaykh Yusuf Talal DeLorenzo (United States) Highlights and Family Broad-Market Indices The Dow Jones Islamic Market Broad-Market Indices intend to measure the global universe of investable equities that pass screens for Shariah compliance. The family includes regional, country, industry and market-cap-based indices, all of which are subsets of the Dow Jones Islamic Market World. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 4

The purpose of the Dow Jones Islamic Market World is to provide a definitive standard for measuring stock market performance for Islamic investors on a global basis, in accordance with S&P Dow Jones Indices established index methodology and the Islamic investment guidelines established by the Shariah Supervisory Board. The methodology used to construct and maintain the index aims to produce an investable index in which all constituent stocks are readily accessible and well traded. Country-level indices are available for each of the 70 entities listed below. Argentina* Egypt Jordan Oman South Korea Australia Estonia Kuwait Pakistan* Spain Austria Finland Lebanon* Peru Sri Lanka Bahrain France Lithuania Philippines Sweden Belgium Germany Luxembourg Poland Switzerland Brazil Greece Malaysia Portugal Taiwan Bulgaria Hong Kong Malta Qatar Thailand Canada Hungary Mauritius* Romania Tunisia* Chile Iceland* Mexico Russia 2 Turkey China 1 India Morocco Saudi Arabia* UAE Colombia Indonesia Netherlands Serbia* Ukraine* Croatia* Ireland New Zealand Singapore U.K. Czech Republic Italy Nigeria* Slovenia U.S. Denmark Japan Norway South Africa Vietnam* 1 Includes offshore listed Chinese companies, ADRs/ADSs and U.S.-listed only stocks. 2 Comprised of DRs traded on the London Stock Exchange. * This country is not covered by the Dow Jones Islamic Market World. Size-Segment Indices. Large-cap, mid-cap and small-cap indices are available at the global level, and for each country and region. The size designation for each constituent is set according to what has been assigned for the corresponding country benchmark index. Sector Indices. The family includes a comprehensive series of global sector indices, as well as sector indices for each country and region. The sectors are defined based on a proprietary classification system, which includes 10 broad Industries, 19 Supersectors, 41 Sectors, and at the most granular level, 114 Subsectors. For further information on the proprietary sector classification system, including the complete sector definitions, please refer to S&P Dow Jones Indices Web site at www.spdji.com. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 5

Blue-Chip Indices Dow Jones Islamic Market CHIME. The index measures the stock performance of 100 leading companies selected from China, India, and the Middle East and North Africa (MENA) region that pass rules-based screens for Shariah compliance. Dow Jones Islamic Market China/Hong Kong Titans 30. The index represents the 30 largest companies whose primary operations are in mainland China and Hong Kong but whose stocks trade on the Stock Exchange of Hong Kong. The constituents of the index must pass rules-based screens for Shariah compliance. Dow Jones Islamic Market International Titans 100. The index measures the stock performance of 100 leading ex-u.s. companies that have passed rules-based screens for Shariah compliance. Dow Jones Islamic Market Malaysia Titans 25. The index measures the top 25 stocks contained in the Dow Jones Islamic Market Malaysia. Dow Jones Islamic Market Titans 100. The index tracks the largest 100 stocks traded globally that have passed rules-based screens for Shariah compliance. The index comprises three regional blue-chip sub-indices: Dow Jones Islamic Market U.S. Titans 50 Dow Jones Islamic Market Europe Titans 25 Dow Jones Islamic Market Asia/Pacific Titans 25 Strategy and Thematic Indices Dow Jones Islamic Market BRC. The index measures the stock performance of companies in the Brazil, Russia and offshore China markets that pass rules-based screens for Shariah compliance. Dow Jones Islamic Market BRIC Equal Weighted. The index measures the stock performance of companies in the Brazil, Russia, India and offshore China markets that pass rules-based screens for Shariah compliance. Dow Jones Islamic Market Global Finance & Takaful. The index measures the stock performance of financial services stocks that pass rules-based screens for Shariah compliance. Insurance stocks that pass such screens are known as Takaful. Dow Jones Islamic Market Global Finance & Takaful ex-saudi. The index measures the stock performance of financial services stocks that pass rules-based screens for Shariah compliance. Insurance stocks that pass such screens are known as Takaful. The index excludes stocks that trade in Saudi Arabia. Dow Jones Islamic Market Sustainability. The index represents companies that are compatible with Islamic investment guidelines and determined to be corporate sustainability leaders. To be included in the index, companies must be constituents of S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 6

both the Dow Jones Islamic Market World and the Dow Jones Sustainability World. Dow Jones Islamic Market Global Select Dividend. The index measures the stock performance of leading dividend paying companies in developed countries worldwide that pass rules-based screens for Shariah compliance. For further information on this index, please refer to the Dow Jones Dividend Indices methodology document located on our Web site, www.spdji.com. This methodology was created by S&P Dow Jones Indices to achieve the aforementioned objective of measuring the underlying interest of each index governed by this methodology document. Any changes to or deviations from this methodology are made in the sole judgment and discretion of S&P Dow Jones Indices so that the index continues to achieve its objective. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 7

Eligibility Criteria and Construction Country Inclusion Criteria Securities issued by companies domiciled in countries classified as developed, emerging, or frontier markets are eligible for inclusion in the Dow Jones Islamic Market Indices. S&P Dow Jones Indices conducts a rigorous country classification process to evaluate the status of global markets. Country Classification Country classification is both an art and a science. While S&P Dow Jones Indices uses quantitative criteria as a guide to classifying countries, the opinions and experiences of global investors are equally important. Many of the issues in determining if a market is developed, emerging or frontier are not amenable to quantitative decisions. Regulations, rules and procedures for foreign exchange trading, trade settlement, availability of company financial data and other factors vary from market to market. At the same time, operating costs imposed on investors by these differences will also vary from investor to investor. While both quantitative measures and a substantial majority of investors may agree on the classification of some markets, there are many cases that are open to debate. Recognizing this, S&P Dow Jones Indices uses a two-step process. First, a series of quantitative criteria provide an initial classification. If this analysis results in a classification change, S&P Dow Jones Indices conducts a client consultation. The final decision is made by the S&P Dow Jones Indices Global Equity Indices Committee based on both the consultation and the quantitative criteria. The quantitative criteria cover a range of factors reflecting macroeconomic conditions, political stability, legal property rights and procedures, and trading and settlement processes. The client consultation seeks to incorporate opinions from major institutional investors on a global basis. For more information, please refer to the S&P Dow Jones Indices Country Classification Methodology. Determining a Company s Country. For information on determining a company s country, please refer to S&P Dow Jones Indices Equity Indices Policies & Practices document located on our Web site, www.spdji.com. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 8

Broad-Market Indices Dow Jones Islamic Market World and Related Sub-Indices Universe. The index universe for the Dow Jones Islamic Market World includes the constituents of 58 country-level benchmark indices, each of which covers approximately 95% of the float-adjusted market capitalization of the underlying market. Exceptions to this rule are as follows: Dow Jones Islamic Market ASEAN. The index universe comprises the constituents of the Dow Jones Indonesia, Dow Jones Malaysia, Dow Jones Philippines, Dow Jones Singapore, Dow Jones Thailand and Dow Jones Vietnam, each of which covers approximately 95% of the float-adjusted market capitalization of the underlying market. Dow Jones Islamic Market GCC. The index universe is the Dow Jones GCC, which covers approximately 95% of the float-adjusted market capitalization of the six countries in the GCC region: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Dow Jones Islamic Market GCC ex-saudi. The index universe is the Dow Jones GCC ex-saudi, which covers approximately 95% of the floatadjusted market capitalization of the represented countries: Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates. The index excludes Saudi Arabia because it is not open to foreign investment. Dow Jones Islamic Market Greater China. The index universe is defined as all companies in the Dow Jones Total Stock Market (TSM) China Offshore, the Dow Jones TSM Hong Kong and the Dow Jones TSM Taiwan. The Dow Jones TSM China Offshore represents approximately 95% of the float-adjusted market capitalization of all the companies whose primary operations are in mainland China but that trade in Hong Kong and the U.S. The Dow Jones TSM Hong Kong and the Dow Jones TSM Taiwan represent approximately 98% of the float-adjusted market capitalization of the Hong Kong and Taiwan markets, respectively. Dow Jones Islamic Market MENA. The index universe is defined as the Dow Jones MENA which represents approximately 95% of the market capitalization of the 11 countries in the MENA region: Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia and the United Arab Emirates. Dow Jones Islamic Market China Offshore Hong Kong. To be considered for the index universe, stocks must meet the following criteria: o o o The company must operate primarily in mainland China but list in Hong Kong. Eligible securities include H-Shares and Red Chips. Securities must have no more than 10 non-trading days during the past three months, and may be subject to additional liquidity screens. Preferred stocks are excluded from the selection universe. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 9

Dow Jones Islamic Market Kuwait. The index universe is defined as all stocks in the Dow Jones Kuwait Composite, which represents all companies domiciled and headquartered in Kuwait whose stocks trade on the Kuwait Stock Exchange. Preferred stocks are excluded from the selection universe. Dow Jones Islamic Market Pakistan. The index universe is defined as all stocks traded on the major exchanges of Pakistan. Preferred stocks are excluded from the selection universe. Dow Jones Islamic Market Sri Lanka. The index universe is defined as all stocks in the Dow Jones Islamic Market World that are domiciled in Sri Lanka and trade on the Colombo Stock Exchange. Preferred stocks are excluded from the selection universe. Dow Jones Islamic Market Turkey. The index universe is defined as all stocks in the Dow Jones Emerging Europe that are traded on the Istanbul Stock Exchange. The Dow Jones Emerging Europe covers approximately 95% of the float-adjusted market capitalization of the region that currently includes Cyprus, the Czech Republic, Estonia, Hungary, Israel, Latvia, Lithuania, Malta, Poland, Russia, Slovenia, Slovakia and Turkey. Preferred stocks are excluded from the selection universe. Constituent Selection. Each index includes all securities in its respective index universe that pass the Shariah compliance screens described in Appendix I. Weighting. The indices are weighted by float-adjusted market capitalization except as detailed below. Weights and any weighting cap factors are reviewed and adjusted quarterly. Dow Jones Islamic Market GCC and Dow Jones Islamic Market GCC ex-saudi. Each index is weighted by float-adjusted market capitalization. Constituent weights are capped at 15% at the country level (30% for Bahrain). Dow Jones Islamic Market Greater China. The index is weighted by float-adjusted market capitalization. The total weight of all Taiwan companies in the index is capped at 30% and the weight of each individual constituent is capped at 10%. Dow Jones Islamic Market MENA. The index is weighted by floatadjusted market capitalization. Country weightings are capped at 45%. Dow Jones Islamic Market China Offshore Hong Kong and Dow Jones Islamic Market Pakistan. The index is weighted by floatadjusted market capitalization. The weight of each individual constituent is capped at 10% of the index. Dow Jones Islamic Market Kuwait. The index is weighted by total market capitalization. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 10

Blue-Chip Indices Dow Jones Islamic Market CHIME Universe. The index is derived from a universe that comprises the constituent stocks of the following indices: Dow Jones Islamic Market World : China H-Shares & Red Chips, as well as stocks traded in Hong Kong, India, GCC ex-saudi Arabia, Morocco, Egypt and Jordan. Dow Jones Islamic Market MENA : Stocks traded in Tunisia, Lebanon and Saudi Arabia. To be eligible for the index, a stock must have an average daily trading volume of at least US$ 500,000 over the past three months and pass the Shariah compliance screens described in Appendix I. Constituent Selection. From the pool of eligible securities, stocks are sorted into the three regions (China, India, and MENA), and stock selection proceeds by region as follows: 1. Stocks are ranked by float-adjusted market capitalization. 2. Stocks are selected by their market-capitalization rankings starting with the largest securities to achieve target constituent counts of 25 for China, 25 for India and 50 for the MENA region. 3. The selections from each region are aggregated to form the Dow Jones Islamic Market CHIME. Sub-indices for each of the three regions (China, India, and MENA) are also maintained. Weighting. The index is weighted by float-adjusted market capitalization. The weight of each individual constituent is capped at 10% of the index. Weights are reviewed quarterly. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 11

Dow Jones Islamic Market China/Hong Kong Titans 30 Universe. The index universe is defined as all stocks included in the Dow Jones Islamic Market Hong Kong and the Dow Jones Islamic Market China Offshore, excluding U.S. listed securities. To be eligible for the index, a stock must have an average daily trading volume of at least HKD 5 million over the past 12 months and pass the Shariah compliance screens described in Appendix I. Constituent Selection. Stocks are selected to the index as follows: 1. Stocks in the selection universe are ranked first by float-adjusted market capitalization and then by 12-month average daily domestic currency trading volume. 2. Stocks are sorted by final rank: an equally weighted combination of the marketcap rank and the trading volume rank. 3. Stocks are selected top-down by final rank until the target constituent number (30) is reached. 4. Constituent lists are finalized at each composition review based on the buffer range of 25-35. Any constituent stock ranked 35 or lower is replaced by the highestranked non-constituent. Any non-constituent stock ranked 25 or higher replaces the lowestranked current index constituent. Weighting. The index is weighted by float-adjusted market capitalization. The weight of each individual constituent is capped at 15% of the index. Weights are reviewed quarterly. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 12

Dow Jones Islamic Market International Titans 100 Universe. The index universe is defined as all country indices in the Dow Jones Global family, which provides approximately 95% market-capitalization coverage of 46 markets. Also included in the index universe is a similarly constructed index for Russia, China, India, Sri Lanka, Turkey and the Middle East (GCC). To be eligible for the index, a stock must pass the Shariah compliance screens described in Appendix I. Constituent Selection. Stocks are selected to the index as follows: 1. Stocks are ranked by float-adjusted market capitalization. 2. The top 100 stocks, starting with the largest, are selected for the index. 3. The constituent list is finalized based on the following rules designed to limit turnover: If a non-constituent is ranked among the top 80 stocks in the final ranking, then it replaces the lowest-ranked index constituent. If a constituent is not ranked among the top 120 stocks in the final ranking, then it is replaced by the highest ranked non-constituent. Weighting. The index is weighted by float-adjusted market capitalization. The weight of each individual constituent is capped at 10% of the index. Weights are reviewed quarterly. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 13

Dow Jones Islamic Market Malaysia Titans 25 Universe. The index universe is defined as all stocks in the Dow Jones Islamic Market Malaysia, which represents all companies domiciled in Malaysia whose stocks trade on the Bursa Malaysia. To be eligible for the index, a stock must pass the Shariah compliance screens described in Appendix I. In addition, any security having more than 10 non-trading days over the past quarter is excluded. Furthermore, any security not considered to be Shariahcompliant by the Shariah Advisory Council (SAC) of the Securities Commission (SC) of Malaysia will also be excluded from the index universe. Constituent Selection. Stocks are selected to the index as follows: 1. Stocks in the selection universe are ranked first by size (float-adjusted market capitalization) and then by liquidity (12 month average daily trading volume). 2. Stocks are sorted by final rank: an equally weighted combination of rank by size and rank by liquidity. 3. Stocks are selected top-down by final rank until the target constituent count (25) is reached. 4. Constituent lists are finalized at each composition review based on the buffer range of 20-30. Any constituent stock ranked 30 or lower is replaced by the highestranked non-constituent. Any non-constituent stock ranked 20 or higher replaces the lowestranked current index constituent. Weighting. The index is weighted by float-adjusted market capitalization. The weight of each individual constituent is capped at 20% of the index. Weights are reviewed quarterly. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 14

Dow Jones Islamic Market Titans 100 Universe. The index universe is defined as all constituent stocks of the Dow Jones Islamic Market World, a global index that is constructed to comply with Islamic investment guidelines. The selection universe for the Dow Jones Islamic Market World itself includes the components of 58 country-level benchmark indices, each of which covers approximately 95% of the float-adjusted market capitalization of the underlying market. To be eligible for the index, a stock must pass the Shariah compliance screens described in Appendix I. Constituent Selection. Stocks are selected to the index as follows: 1. For each regional sub-index, stocks are chosen as constituents from the selection universe based on the following steps: Stocks in the selection universe are ranked by float-adjusted market capitalization. Stocks are selected for the index top-down, starting with the largest company, until the target constituent count is reached. 2. Regional sub-index constituent lists are finalized at each composition review based on the following buffer ranges: Buffer Range Dow Jones Islamic Market U.S. Titans 50 40-60 Dow Jones Islamic Market Europe Titans 25 20-30 Dow Jones Islamic Market Asia/Pacific Titans 25 20-30 For the Dow Jones Islamic Market Europe Titans 25 and Dow Jones Islamic Market Asia/Pacific Titans 25, any constituent stock ranked 30 or lower is replaced by the highest-ranked nonconstituent. For the Dow Jones Islamic Market U.S. Titans 50, any constituent stock ranked 60 or lower is replaced by the highestranked non-constituent. For the Dow Jones Islamic Market Europe Titans 25 and Dow Jones Islamic Market Asia/Pacific Titans 25, any nonconstituent stock ranked 20 or higher replaces the lowest-ranked current index constituent. For the Dow Jones Islamic Market U.S. Titans 50, any non-constituent stock ranked 40 or higher replaces the lowestranked current index constituent. While each individual index is fixed at either 25 or 50 companies, it is possible for an index to contain more than the target number of stocks at any point in time. Such cases arise when an index contains more than one share class for a particular company. The index will use both share classes in its index calculation, in order to maintain the full market capitalization weight of the company in the index. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 15

The Dow Jones Islamic Market Titans 100 is constructed by combining the constituents of the three regional sub-indices. Weighting. The index is weighted by float-adjusted market capitalization. The weight of each individual constituent within each of the three regional sub-indices is capped at 10%. In the event that a company has more than one share class represented in the index, that company s weight is capped at 10% based on total float-adjusted market capitalization. The rebalanced weight is then distributed proportionally to each share class' float-adjusted market capitalization. If capping is not required, both share classes are weighted according to their natural float-adjusted market capitalization. Weights are reviewed quarterly. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 16

Strategy and Thematic Indices Dow Jones Islamic Market BRC and Dow Jones Islamic Market BRIC Equal Weighted Universe. The index universe is defined to include constituents of the Dow Jones Brazil ; ADRs and GDRs for Russia (and India for the Dow Jones Islamic Market BRIC Equal Weighted ); and offshore listed China companies including ADRs/ADSs and U.S.-listed only stocks. If a security is listed on two or more overseas exchanges (e.g. an H-share also trades as an ADR), only the security with the higher trading volume is eligible. Constituent Selection. The index includes all securities in the index universe that pass the Shariah compliance screens described in Appendix I. Weighting. For each index the weighting is as follows: Dow Jones Islamic Market BRC. The three represented countries are equally weighted within the index. Within each country, index constituents are weighted based on float-adjusted market capitalization. Weights are reviewed quarterly. Dow Jones Islamic Market BRIC Equal Weighted. The four represented countries are equally weighted within the index. Securities are weighted by float-adjusted market capitalization, subject to a 10% cap on the weight of any individual security. Weights are reviewed quarterly. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 17

Dow Jones Islamic Market Global Finance & Takaful and Dow Jones Islamic Market Global Finance & Takaful ex-saudi Universe. The index universe is made up of all companies in the Dow Jones es equity security database in the countries covered by the Dow Jones Islamic Market Indices (excluding Saudi Arabia for the Dow Jones Islamic Market Global Finance & Takaful ex-saudi ). Eligible for consideration are companies classified into the following Supersectors based on a proprietary classification system: Banks (8300) Financial Services (8700) Insurance (8500) For further information on the proprietary sector classification system, including the complete sector definitions, please refer to S&P Dow Jones Indices Web site at www.spdji.com. Constituent Selection. The index includes all securities in the index universe that pass the Shariah compliance screens described in Appendix I. Weighting. Each index is weighted based on float-adjusted market capitalization with a 15% cap on any single constituent weight. Weights are reviewed quarterly. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 18

Dow Jones Islamic Market Sustainability Universe. The index universe derives from companies that are constituents of the Dow Jones Islamic Market World and the Dow Jones Sustainability World. For details on these indices, please refer to each index s Methodology document. Constituent Selection. The index includes all securities in the index universe that are constituents of both the Dow Jones Islamic Market World and the Dow Jones Sustainability World and that pass the Shariah compliance screens described in Appendix I. Weighting. The index is weighted by float-adjusted market capitalization. The weight of each individual constituent is capped at 10% of the index. Weights are reviewed quarterly. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 19

Calculations Approaches Each index is calculated by means of the divisor methodology used in all S&P Dow Jones Indices equity indices. On any given day, the index value is the quotient of the total float-adjusted market capitalization of the index s constituents and its divisor. Continuity in index values is maintained by adjusting the divisor for all changes in the constituents share capital after the base date. This includes additions and deletions to the index, rights issues, share buybacks and issuances, and spin-offs. The divisor s time series is, in effect, a chronological summary of all changes affecting the base capital of the index. The divisor is adjusted such that the index value at an instant just prior to a change in base capital equals the index value at an instant immediately following that change. For more information on the calculation methodology, please refer to S&P Dow Jones Indices Mathematics Methodology. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 20

Maintenance Broad-Market Indices Rebalancing. composition is reviewed quarterly, in March, June, September and December. As part of the rebalancing process, constituent shares, weights and any weighting factors are updated. In addition, the investable weight factor (IWF) for each stock is reviewed and updated as needed on an annual basis in September. Changes are announced on the second Friday of the review month and are implemented at the opening of trading on the Monday following the third Friday of the review month. Market data from the end of January, April, July and October is used as the basis for the revision process. The review process is carried out in accordance with the rules described in the chapter Eligibility Criteria and Construction. Ongoing Maintenance. The index is reviewed on an ongoing basis for unusual events such as delistings, bankruptcies, mergers and takeovers. Changes to index composition and related weight adjustments are made as soon as they are effective. These changes are typically announced two business days prior to the implementation date. Change of Primary Listing. When a company s primary market listing changes, it remains in the index only if its new exchange is eligible for the index. Additions. When a new issue qualifies for and is added to the 58 country-level benchmark indices, it is added to the Dow Jones Islamic Market World at the subsequent quarterly rebalancing, provided it passes the sector-based and accountingbased screens described in Appendix I. Deletions. Any constituent removed from the 58 country-level benchmark indices is removed from the Dow Jones Islamic Market World at the subsequent quarterly rebalancing. In addition, current index constituents that no longer pass the sector-based or accounting-based screens described in the Appendix I are deleted from the index at the subsequent quarterly rebalancing. Blue-Chip Indices Rebalancing. The index undergoes an annual reconstitution and quarterly rebalancing as follows: composition is reviewed annually in September (December for the Dow Jones Islamic Market CHIME 100 ). In addition, the investable weight factor (IWF) for each stock is reviewed and updated as needed on an annual basis in September. Changes are announced on the second Friday of the review month S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 21

and are implemented at the opening of trading on the Monday following the third Friday of the review month. Market data from the end of July (October for the Dow Jones Islamic Market CHIME 100 composition review) is used as the basis for the revision process. The review process is carried out in accordance with the rules described in the chapter Eligibility Criteria and Construction. Shares, weights and weighting cap factors are updated quarterly in March, June, September and December. Changes are announced on the second Friday of the review month and are implemented at the opening of trading on the Monday following the third Friday of the review month. On-going Maintenance. The index is reviewed on an ongoing basis for unusual events such as delistings, bankruptcies, mergers and takeovers. Changes to index composition and related weight adjustments are made as soon as they are effective. These changes are typically announced two business days prior to the implementation date. Additions and Deletions. Generally, no companies are added to an index between annual rebalancings, except as a replacement for a deleted constituent as described below. Current index constituents that no longer pass the sector-based or accounting-based screens described in the Appendix I are deleted from the index and replaced at the subsequent quarterly rebalancing. As part of on-going index maintenance, companies that are removed from the index subsequent to an unusual corporate event, such as a delisting, bankruptcy, merger or takeover are replaced at the subsequent quarterly rebalancing. Strategy and Thematic Indices Rebalancing. composition is reviewed quarterly, in March, June, September and December. As part of the rebalancing process, constituent shares, weights and any weighting factors are updated. In addition, the investable weight factor (IWF) for each stock is reviewed and updated as needed on an annual basis in September. Changes are announced on the second Friday of the review month and are implemented at the opening of trading on the Monday following the third Friday of the review month. Market data from the end of January, April, July and October is used as the basis for the revision process. The review process is carried out in accordance with the rules described in the chapter Eligibility Criteria and Construction. Ongoing Maintenance. The index is reviewed on an ongoing basis for unusual events such as delistings, bankruptcies, mergers and takeovers. Changes to index composition and related weight adjustments are made as soon as they are effective. These changes are typically announced two business days prior to the implementation date. Additions and Deletions. Generally, no companies are added to an index between quarterly rebalancings. Current index constituents that no longer pass the sector-based or S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 22

accounting-based screens described in the Appendix I or that otherwise become ineligible for index membership are deleted from the index at the subsequent quarterly rebalancing. Corporate Actions For more information, please refer to S&P Dow Jones Indices Equity Indices Policies & Practices document located on our Web site, www.spdji.com. Currency of Calculation Please refer to Appendix II for each index s respective currencies of calculation. Exchange Rate Real-time spot Forex rates, as supplied by Reuters, are used for ongoing index calculation of real-time indices. WM/Reuters foreign exchange rates are taken daily at 4:00 PM London Time and used in the end-of-day calculation of the indices. These mid-market fixings are calculated by The WM Company based on Reuters data and appear on Reuters pages WMRA. Base Dates and History Availability Please refer to Appendix III for history availability, base dates and base values. Investable Weight Factor (IWF) All issues in the Dow Jones Islamic Market Indices are assigned a float factor, called an Investable Weight Factor (IWF). The IWF ranges between 0 and 1 and is an adjustment factor that accounts for the publicly available shares of a company. The company s adjusted market capitalization determines an equity issue s relative weight in the index. An exception to this rule is the Dow Jones Islamic Market Kuwait as it is weighted by total market capitalization. Please refer to the S&P Dow Jones Indices Float Methodology document for details. Shares. For more information on shares outstanding changes, please refer to S&P Dow Jones Indices Equity Indices Policies & Procedures document located on our Web site, www.spdji.com. Other Adjustments In cases where there is no achievable market price for a stock being deleted, it may be removed at a zero or minimal price at the Committee s discretion, in recognition of the constraints faced by investors in trading bankrupt or suspended stocks. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 23

Data Total Return Indices Total return index series are calculated for the indices as well as the price return series. Ordinary cash dividends are applied on the ex-date in calculating the total return series. Special dividends are those dividends that are outside of the normal payment pattern established historically by the issuing corporation. These may be described by the corporation as special, extra, year-end, or return of capital. Whether a dividend is funded from operating earnings or from other sources of cash does not affect the determination of whether it is ordinary or special. Special dividends are treated as corporate actions with offsetting price and divisor adjustments; the total return index series reflect both ordinary and special dividends. Net Dividends. With the exception of certain indices noted below, total return indices reflect the return to an investor where dividends are reinvested after the deduction of a withholding tax. The tax rate applied is the rate to non-resident institutions that do not benefit from double taxation treaties. Gross Dividends. Total return indices for the following reflect the return to an investor where gross dividends are reinvested. Blue-Chip Indices: Dow Jones Islamic Market TM China/Hong Kong Titans 30 Dow Jones Islamic Market TM Malaysia Titans 25 For more information on the tax rates used in the calculation of net return indices, please refer to S&P Dow Jones Indices Equity Indices Policies & Practices document located on our Web site, www.spdji.com. Please refer to the S&P Dow Jones Indices Mathematics Methodology for more detail on total and net return index calculations. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 24

Governance Committee The Dow Jones Islamic Market Indices are maintained by the S&P Dow Jones Indices Global Thematic and Strategy Indices Committee. All committee members are fulltime professional members of S&P Dow Jones Indices staff. The committee meets at least once a month. At each meeting, the Committee reviews pending corporate actions that may affect index constituents, statistics comparing the composition of the indices to the market, companies that are being considered as candidates for addition to an index, and any significant market events. In addition, the Committee may revise index policy covering rules for selecting companies, treatment of dividends, share counts or other matters. S&P Dow Jones Indices considers information about changes to its indices and related matters to be potentially market moving and material. Therefore, all Committee discussions are confidential. For information on Quality Assurance and Internal Reviews of Methodology, please refer to S&P Dow Jones Indices Equity Indices Policies & Practices document located on our Web site, www.spdji.com. Shariah Expertise S&P Dow Jones Indices has contracted with Ratings Intelligence Partners which is a London/Kuwait based Shariah consultancy. The company was established in 2000 to develop leading-edge solutions for the global Islamic investment market. Its current focus is on consulting leading hedge fund organizations in the implementation of Shariah compliant hedge funds. The emphasis is presently on equity long/short strategies; however, work is underway to expand the process to other strategies, subject to Shariah approval. The Shariah Supervisory Board The Shariah Supervisory Board was established to advise the company on the methodology for screening securities for inclusion in the Dow Jones Islamic Market Indices and matters relating to the Shariah compliance of the index constituents. S&P Dow Jones Indices provides quarterly updates on the index constituents to the Shariah Supervisory Board and reviews new Shariah proposals from the board. All issues relating to business decisions, including index constituent changes, are within the province of the Committee. The Shariah Supervisory Board is encouraged to S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 25

put forth recommendations for changes to the Committee which in turn makes the ultimate business decision. The Shariah Supervisory Board consists of five eminent Shariah scholars from around the world. The geographic diversity of the scholars helps to ensure that diverse interpretations of Shariah law are represented. The members of the Shariah Supervisory Board are: Shaykh Nizam Yaquby (Bahrain). Mr. Yaquby is a member of the Islamic supervisory boards for several Islamic institutions, including the Arab Islamic Bank and the Abu Dhabi Islamic Bank. His work has appeared in the following publications: Risalah Fi al Tawbah, Qurrat al 'Ainayn fi Fada il Birr al Walidayn, Irshad al 'Uqala'ila Hukum al Qira'h min al Mushaf fi al Salah, Tahqia al Amal fi Ikhraj Zakat al Fitr bi al Mal. Shaykh Dr. Mohd Daud Bakar (Malaysia). Dr. Bakar is currently a member of the Shariah Advisory Council of many financial institutions in Malaysia and around the world, including the Central Bank of Malaysia, Securities Commission of Malaysia, International Islamic Financial Market in Bahrain, Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) in Bahrain and HSBC (Malaysia). Shaykh Dr. Mohamed A. Elgari (Saudi Arabia). Dr. Elgari is an associate professor of Islamic Economics and the director of the Center for Research in Islamic Economics at King Abdulaziz University in Saudi Arabia. He is an expert at the Islamic Jurisprudence Academy (OIC), Economics. He is also an advisor to several Islamic financial instituitons worldwide and the author of many books on Islamic banking. Shaykh Abdul Sattar Abu Ghuddah (Syria). Dr. Abu Ghuddah is a senior Shariah Advisor to Albaraka Investment Co. of Saudi Arabia. He holds a PhD in Islamic Law. Dr. Abu Ghuddah has published many books on Islamic Financial transactions. He was an advisor for Islamic Law Encyclopeadia (Kuwait Awqaf Ministry). Dr. Abu Ghuddah is a member and chairman of several reputed Islamic Shariah Boards. Shaykh Yusuf Talal DeLorenzo (United States). Mr. DeLorenzo is considered a leading Islamic scholar in the United States. He has translated over twenty books from Arabic, Persian, and Urdu for publication in English and has been commissioned to prepare a new translation of the Qur'an. Mr. DeLorenzo compiled the first English translation of legal rulings issued by Shariah supervisory boards on the operations of Islamic banks. Since 1989, Mr. DeLorenzo has served as secretary of the Figh Council of North America. He is also a Shariah consultant to several Islamic financial institutions and was an advisor on Islamic education to the government of Pakistan. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 26

Policy Announcements All index constituents are evaluated daily for data needed to calculate index levels and returns. All events affecting the daily index calculation are typically announced up to 30 days in advance via the Corporate Events report (SDE), delivered daily via ftp to all clients. Any unusual treatment of a corporate action or short notice of an event may be communicated via email to clients. methodology is constantly under review for best practices, and any changes are announced well ahead of time via the Web site and email to all clients. Pro-forma Files In addition to the corporate events file (.SDE), S&P Dow Jones Indices provides constituent pro-forma files each time the indices rebalance. The pro-forma file is typically provided daily five business days in advance of the rebalancing date and contains all constituents and their corresponding weights and index shares effective for the upcoming rebalancing. Since index shares are assigned based on prices one week prior to the rebalancing, the actual weight of each stock at the rebalancing differs from these weights due to market movements. Please visit www.spdji.com for a complete schedule of rebalancing timelines and proforma delivery times. Holiday Schedule The Dow Jones Islamic Market Indices are calculated daily, throughout the calendar year. The only days an index is not calculated are on days when all exchanges where an index s constituents are listed are officially closed or if WM Reuters exchange rates services are not published. A complete holiday schedule for the year is available on S&P Dow Jones Indices Web site at www.spdji.com. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 27

Unscheduled Market Closures In situations where an exchange is forced to close early due to unforeseen events, such as computer or electric power failures, weather conditions or other events, S&P Dow Jones Indices will calculate the closing price of the indices based on (1) the closing prices published by the exchange, or (2) if no closing price is available, the last regular trade reported for each security before the exchange closed. If an exchange fails to open due to unforeseen circumstances, S&P Dow Jones Indices treats this closure as a standard market holiday. The index will use the prior day s closing prices and shifts any corporate actions to the following business day. If all exchanges fail to open or in other extreme circumstances, S&P Dow Jones Indices may determine not to publish the index for that day. For further information on Unexpected Exchange Closures, please refer to S&P Dow Jones Indices Equity Indices Policies & Practices document located on our Web site, www.spdji.com. Recalculation Policy S&P Dow Jones Indices reserves the right to recalculate an index under certain limited circumstances. S&P Dow Jones Indices may choose to recalculate and republish an index if it is found to be incorrect or inconsistent within two trading days of the publication of the index level in question for one of the following reasons: 1. Incorrect or revised closing price 2. Missed corporate event 3. Late announcement of a corporate event 4. Incorrect application of corporate action or index methodology Any other restatement or recalculation of an index is only done under extraordinary circumstances to reduce or avoid possible market impact or disruption as solely determined by the Committee. For more information on the recalculation policy, please refer to S&P Dow Jones Indices Equity Indices Policies & Practices document located on our Web site, www.spdji.com. Real-Time Calculation Real-time, intra-day, index calculations are executed for certain indices, whenever any of their primary exchanges are open. Real-time indices are not restated. For information on Calculations and Pricing Disruptions, Expert Judgment and Data Hierarchy, please refer to S&P Dow Jones Indices Equity Indices Policies & Practices document located on our Web site, www.spdji.com. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 28

Dissemination levels are available through S&P Dow Jones Indices Web site at www.spdji.com, major quote vendors (see codes below), numerous investment-oriented Web sites, and various print and electronic media. Tickers Please refer to Appendix IV for Bloomberg and Reuters tickers. FTP Daily stock level and index data are available via FTP subscription. For product information, please contact S&P Dow Jones Indices, www.spdji.com/contact-us. Web site For further information, please refer to S&P Dow Jones Indices Web site at www.spdji.com. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 29

Appendix I Shariah Compliance Screens Sector-Based Screens Based on the Shariah Supervisory Board established parameters, the businesses listed below are inconsistent with Shariah law. The majority of Shariah scholars and boards hold that these industries and their financial instruments are inconsistent with Shariah precepts and hence are not suitable for Islamic investment purposes. Although no universal consensus exists among contemporary Shariah scholars on the prohibition of tobacco companies and the defense industry, most Shariah boards have advised against investment in companies involved in these activities. Income from the following impure sources cannot exceed 5% of revenue. Alcohol Tobacco Pork-related products Conventional financial services (banking, insurance, etc.) Weapons and defense Entertainment (hotels, casinos/gambling, cinema, pornography, music, etc.) Companies classified as Financial (8000) according to a unique proprietary classification system are considered eligible if the company is incorporated as an Islamic Financial Institution, such as: Islamic Banks Takaful Insurance Companies Companies classified as Real Estate (8600) according to a unique proprietary classification system are considered eligible if the company s operations and properties are conducting business within Shariah principles. S&P Dow Jones Indices: Dow Jones Islamic Market Indices Methodology 30