Guide to products and services

FTSE Russell.
Your global
index partner
ftserussell.com
Contents

4 6 10 12
About us FTSE Russell Our history Industry
difference classification
14 18 62
Custom index Our indexes ETFs and
solutions derivatives
About us

4 FTSE Russell
FTSE Russell is a leading global provider of benchmarks, analytics and data solutions for
investors worldwide, giving a precise view of the markets relevant to any investment process.
A comprehensive range of reliable and accurate indexes provides investors with the tools
they require to measure and analyze markets across asset classes, styles or strategies.

FTSE Russell index expertise and products are used FTSE Russell is focused on applying the highest industry
extensively by institutional and retail investors globally. standards in index design and governance, employing
We bring a combined experience of more than half a century transparent rules-based methodology informed by
in index management and are a trusted source of market independent committees of leading market participants.
information. Leading asset owners, asset managers, ETF FTSE Russell fully embraces the IOSCO Principles and
providers and investment banks have chosen FTSE Russell its Statement of Compliance has received independent
indexes to benchmark their investment performance and assurance. Index innovation is driven by client needs and
create ETFs, structured products and customer partnerships, allowing FTSE Russell to continually
index-based derivatives. enhance the breadth, depth and reach of its offering.

Guide to products & services 5

FTSE Russell
difference

Whether you seek a benchmark or research tool to support

an investment strategy, choosing the right index partner
has never been more important. Through our continuous
engagement with clients, FTSE Russell has become a trusted
partner and source of industry perspective, building bridges
and helping professionals perform at their best.

6 FTSE Russell
 More than half a
century of building and
innovating in index
creation.

A global team of A history of the

index experts highest standards in
dedicated to meeting index governance
our clients’ needs. and quality.

Guide to products & services 7

The FTSE Russell difference

Authoritative Deep understanding Responsive

Trusted source for index data 100+ research professionals High client engagement
Relevant methodology Global, multi-asset capabilities Market consultation and
consensus building
Default reference for investors Academically rigorous and
transparent methodology Deep research capabilities to enhance
Strong governance for relevance
our product development
and compliance Global partners including over
25 exchanges Specialized support across regions and
time zones
Expert internal and external
advisory committees Experienced custom index team
available to help meet clients’ unique
requirements

8 FTSE Russell
Relevant, accurate
and reliable solutions

Relevant Accurate Reliable

Clients require indexes that meet current Clients require accurate indexes that Clients require an engaged index partner
needs—and evolve and innovate as those are built to meet their particular who is going to anticipate and respond to
requirements change. investment needs—across markets their needs.
and asset classes.
Our indexes are based on the most Our indexes combine academic rigor
relevant data, calculated using the most Our indexes are designed and maintained with practical relevance so that you can
robust methodology and delivered by experienced professionals with deep use them with confidence to inform
according to your requirements. industry knowledge. your investment decisions, and as
a foundation for your index-related
investment products.

Guide to products & services 9

Our history

10 FTSE Russell
As a global leader in index tools and 2015 FTSE & Russell combined to create FTSE Russell
2014 FTSE Global Factor Indexes
insights, FTSE Russell has a strong
2013 FTSE TMX Global Debt Capital Markets
heritage and forward-looking approach 2011 Russell Defensive & Dynamic Indexes®
in developing and implementing index 2008 FTSE Frontier 50 Index
2006 FTSE NAREIT US Real Estate Index Series
solutions based on investor needs
2005 FTSE EPRA/NAREIT Index Series
and priorities. FTSE RAFI Series
2003 Industry Classification Benchmark (ICB)
FTSE Global Equity Index Series (FTSE GEIS)
2001 FTSE China Index Series
FTSE4Good Index Series
2000 FTSE All-World Index
1995 FTSE established as independent company
1987 Russell Style Indexes
1986 FT-Actuaries World Index
1984 Russell Indexes established
Russell 1000®
Russell 2000®
Russell 3000®
FTSE 100
1962 FT-Actuaries All-Share Index

Guide to products & services 11

Industry
classification

Industry classification is determined according Each company is allocated to the

subsector with the definition that most
to the Industry Classification Benchmark (ICB), closely represents the nature of its
business, which is determined by its
which is a globally recognized standard, operated primary source of revenue and other
and managed by FTSE Russell for categorizing publicly available information. Virtually
any equity-related security that an
companies and securities. Approximately 97,000 investment professional will encounter
is covered by the ICB structure,
securities worldwide are classified by the ICB providing a standardized basis for
system, providing a comprehensive data source analysis, stock selection, performance
measurement and product design.
for global sector analysis for the investment
community and other organizations worldwide. See www.icbenchmark.com for more
information about the ICB approach and
how it is managed.

12 FTSE Russell
10 industries

19 supersectors

41 sectors

114 subsectors

Guide to products & services 13

Custom index
solutions

FTSE Russell offers custom index solutions to help you

implement your unique investment strategies. We are
focused on providing tailored indexes to a wide variety
of clients including buy side, sell side, custodians,
asset owners, exchanges, investment consultants and
exchange-traded fund providers.

14 FTSE Russell
Design from a Access a Connect with
broad range of comprehensive a dedicated Custom
customization database of Index team
options global equities A team of research, operations and
product management professionals
As with all FTSE Russell indexes, Customize your index through the
provide personalized service to assist in
custom indexes are underpinned by use of an extensive and evolving
index design and execution. From start
our world-class index design standards database of global securities from over
to finish, our responsive approach to
of transparency, clarity, and technical 80 countries with a broad range of asset
index design means that we can deliver a
excellence. We offer you flexibility to classes including equities, fixed income
customized solution on time and without
apply various security selection criteria, and alternative investments, such as
compromising quality. Our dedicated
weighting schemes, maintenance privately owned companies. A wide range
teams provide 24-hour client support
rules and screens. of screening criteria can be used and
from around the globe.
indexes may be tax adjusted, capped,
hedged and blended.

Leverage FTSE
Russell’s index Benefit from an
calculation expertise independent index
With a combined experience of more calculator
than half a century in index management,
FTSE Russell is a leader in innovative FTSE Russell acts as an unaffiliated
index design, calculating over 700,000 index calculator powered by the FTSE
benchmarks daily, covering 98% of the Russell brand.
investable market globally.

Guide to products & services 15

The many ways to customize
a FTSE Russell index
Begin with an index from FTSE Russell and finish with a
FTSE Russell Custom Index tailored to your specific needs.

16 FTSE Russell
1 Modify the Starting with a Country/region Client-defined list of
securities
FTSE Russell index, Sector/subsector/industry
index universe include or exclude Style (value, growth,
defensive, dynamic)

2 Define the Screen securities Size Thematic and strategy

methodologies
based on Ratios
index structure Liquidity

Apply various Equal, fixed, or capped Short or leveraged

weighting schemes Country/sector neutral Client-specified weights
By dividends or ratios

Target regulatory- 25/50 (US RIC)

driven diversification 10/40 (UCITS)
requirements

3 Specify
the index
Define currency
and tax rates
Report in one or more
foreign currencies
Full or partial hedging
Client-defined tax rates

maintenance Rebalance Annual, semi-annual,

quarterly, monthly
frequency

Guide to products & services 17

Introducing our
indexes

FTSE Russell combines the expertise of over 100 researchers

with the knowledge of our partners and our expert external
and internal advisory committees to create global multi-asset
indexes that are based on academically rigorous and relevant
methodologies. Thousands of unique indexes are calculated
on a daily basis—from global benchmarks to primary domestic
indicators, from equities to fixed income, developed markets
to frontier and a broad range of thematic and alternatively-
weighted indexes.

18 FTSE Russell
The indexing continuum

Size Thematic
FTSE 250 Mid-Cap UK Dividend Yield Weighted Alternatively Weighted
Russell 1000 Large-Cap US Geographic Exposure FTSE RAFI Russell Fundamental
Russell 2000 Small-Cap US Sustainable Yield FTSE RAFI Low Volatility Russell Pure Style
FTSE RAFI Equity Income Russell US Sector Equal Weight
Style
FTSE 100 Equally Weighted Russell 1000 Equal Weight
Russell Growth / Value
FTSE All-World GDP Weighted Russell High Efficiency Defensive (HEDI)
Russell Defensive/Dynamic
FTSE Equal Risk Contribution (ERC)
FTSE Minimum Variance
REITS and Infrastructure
FTSE ERPA-NAREIT Global Real Estate Single-Factor
FTSE Global Infrastructure FTSE Value FTSE Momentum
FTSE Quality FTSE Size
Local Market FTSE Volatility FTSE Illiquidity
FTSE ASFA All-Share
Style Thematic FTSE Yield
FTSE China A50
FTSE JSE Top 40 Focused Alternatively Multi-Factor
FTSE MIB Weighted FTSE Emerging Quality/Value/Volatility
Russell 1000 US Equity FTSE Developed Europe Quality/Volatility Yield
Russell/Nomura Japan Equity FTSE Emerging Comprehensive
Broad Cap Russell 1000 Comprehensive
Weighted Factor Russell 1000 Low Volatility Focused
FTSE GEIS Russell 1000 Yield Focused
Russell 3000 Broad-Cap US Russell 1000 Momentum Focused

Guide to products & services 19

Market Cap Weighted Market Cap Weighted
Alternatively Weighted
Global

Factor

Currency

ESG

Fixed Income The FTSE Global Equity Index Series represents the entire global
equity opportunity set with a modular structure that provides a
wealth of choices in index coverage. The series covers more than
Industry Specific 7,000 securities in 46 different countries and captures approximately
98% of the world’s investable market capitalization.
20 FTSE Russell
FTSE Global Equity The FTSE Global Equity Index Series (FTSE GEIS) is divided into Developed,
Advanced Emerging and Secondary Emerging markets with indexes
calculated at regional, national and sector level.
Indexes can be divided into all cap, large, mid, or small cap. Examples include
the all-encompassing FTSE Global All Cap Index (all cap), the FTSE All-World
Index (large/mid cap), and the FTSE Global Small Cap Index (small cap).

FTSE All-World
Key institutional benchmark
Around 3,000 stocks

FTSE Global
Representative Small Cap
Accurately reflects the Around 4,500 stocks
investment opportunity set
FTSE Developed
Key institutional benchmark
Comprehensive Around 2,000 stocks
Seeks exhaustive coverage of
the investable universe FTSE Emerging
Around 1,000 stocks

Investable
Free-float adjusted and FTSE Global All Cap
screened for liquidity Around 7,500 stocks

Developed Large Cap

Advanced Mid Cap
Emerging
Secondary Small Cap
Emerging

Guide to products & services 21

FTSE Emerging Markets FTSE Emerging Markets Indexes are part of the FTSE Global Equity Index
Series (GEIS). The series includes large and mid cap securities from advanced
and secondary emerging markets, classified in accordance with FTSE’s
transparent Country Classification Review Process. The FTSE Emerging
Markets Index provides investors with a comprehensive means of measuring
the performance of the most liquid companies in the emerging markets.

FTSE Frontier The FTSE Frontier Index Series provides a comprehensive and transparent
series of benchmarks for the performance of large, mid and small cap equity
securities from eligible Frontier markets in Europe, the Americas, Asia-Pacific,
Africa and the Middle East. FTSE Frontier Indexes can be segmented by size,
region, country and industry Sectors. It is separate from, but complementary
to and compatible with, FTSE’s Global Equity Index Series (FTSE GEIS). In
combination, FTSE GEIS and FTSE Frontier Indexes offer coverage of the
global investment opportunity set.

FTSE Global China A Inclusion The FTSE Global China A Inclusion Indexes are a series of benchmarks
providing market participants with a choice of how to include China A Shares
in global benchmarks. The allocation of China A Shares is proportional to the
total approved QFII/RQFII quota available to international investors, or can be
customized based on an investor’s specific situation. Market participants who
do not wish to have A Shares in their global benchmarks can continue to use
the FTSE Global Equity Index Series, which will remain unchanged.

22 FTSE Russell
FTSE Shariah Global Equity The FTSE Shariah Global Equity Index Series is based on the large and mid
cap stocks in the FTSE GEIS universe. Screening is undertaken by Shariah
consultants, Yasaar Limited, against a set of guiding principles. The series has
been fully certified as Shariah-compliant through the issue of a Fatwa (Islamic
legal opinion) by Yasaar’s principals.

Russell-IdealRatings Islamic The Russell-IdealRatings Islamic Index Series is a global-equity series that
reflects established Shariah investment guidelines. Combining the deep
experience of FTSE Russell and the oversight of IdealRatings, these indexes
are representative of the global Shariah compliant opportunity set.

Guide to products & services 23

Market Cap Weighted Market Cap Weighted
Alternatively Weighted
U.S.

Factor

Currency

ESG

Fixed Income Our broad range of U.S. indexes allows investors to track current and
historical market performance by specific size, investment style and
other market characteristics. Since launching our research-based
Industry Specific Russell U.S. indexes in 1984, we continue to create products that give
investors an edge in the complex investment universe.
24 FTSE Russell
Russell U.S. All Russell U.S. indexes are subsets of the Russell 3000E™ Index, which
includes the well-known large cap Russell 1000 Index and small cap
Russell 2000 Index.

As of May 29, 2015

$750.5 billion
Russell 3000® Russell 1000® Russell Russell
Index Index Top 200® Top 50®
3,000 largest U.S. 91% of Russell Index Mega Cap
stocks 3000® Index 63% of Russell Index
98% of U.S. equity 3000® Index 37% of Russell
market cap 3000® Index
Largest: $750.5 B
$90.8 billion
Smallest: $176.7 M

$25.7 billion
Russell Midcap®
$8.7 billion Index
29% of Russell
3000® Index Russell 2500®
$3.4 billion Index
20% of Russell
Russell 2000® 3000® Index
$813 million Index
9% of Russell
Russell
3000® Index Microcap® Index
$176.7 million <3% of U.S. equity
market
$30.4 million

Guide to products & services 25

Russell 3000® The Russell 3000 Index measures the performance of the largest 3,000 U.S.
companies representing approximately 98% of the investable U.S. equity
market. The Russell 3000 Index is constructed to provide a comprehensive,
unbiased and stable barometer of the broad market and is completely
reconstituted annually to ensure new and growing equities are reflected.

Russell 1000® The Russell 1000 Index measures the performance of the large-cap
segment of the U.S. equity universe. It is a subset of the Russell 3000
Index and includes approximately 1,000 of the largest securities based
on a combination of their market cap and current index membership. The
Russell 1000 represents approximately 91% of the U.S. market. The Russell
1000 Index is completely reconstituted annually to ensure new and growing
equities are reflected.

Russell 2000® The Russell 2000 Index measures the performance of the small-cap segment
of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell
3000 Index representing approximately 9% of the total market capitalization
of that index. It includes approximately 2,000 of the smallest securities based
on a combination of their market cap and current index membership. The
Russell 2000 is constructed to provide a comprehensive and unbiased small-
cap barometer and is completely reconstituted annually to ensure larger
stocks do not distort the performance and characteristics of the true small-
cap opportunity set.

26 FTSE Russell
Russell Microcap® The Russell Microcap Index measures the performance of the microcap
segment of the U.S. equity market. Microcap stocks make up less than 3%
of the U.S. equity market (by market cap) and consist of the smallest 1,000
securities in the small-cap Russell 2000 Index, plus the next 1,000 smallest
eligible securities by market cap. The Russell Microcap Index is constructed to
provide a comprehensive and unbiased barometer for the microcap segment
trading on national exchanges. The index is completely reconstituted annually
to ensure new and growing equities are reflected and companies continue to
reflect appropriate capitalization and value characteristics.

Russell Style In 1987, based on research showing that major investing styles move in and
out of favor over time, Russell developed separate benchmarks for tracking
growth and value stocks. Developed to better adapt to the changing markets,
this groundbreaking innovation has now become industry standard with a
comprehensive series of style indexes that best reflect the specific style or
market segment being measured.

Guide to products & services 27

Russell Stability The Russell Stability Indexes® add a Third Dimension of Style®, independent
from growth and value. The more stable index of the series is called Defensive
and the less stable index is called Dynamic. The indexes represent the
market based on the sensitivity to economic cycles, credit cycles and market
volatility, measured at the company level in terms of volatility (including price
and earnings), leverage and return on assets. These indexes can be powerful
research tools and can deliver a new way to benchmark and track exposures.

Constructing the Russell Volatility Quality

Stability Indexes

Percentages shown are

the weights applied to 1
50% 50% 33% 33% 33%
60 month total 52 week total earnings leverage return on
the individual indicators return volatility return volatility variability assets
that are used to
determine Stability index
membership.

2 50% volatility score 50% quality score

1 = defensive
3 Stability probability 0 = dynamic

28 FTSE Russell
Guide to products & services 29
Market Cap Weighted Market Cap Weighted
Alternatively Weighted
UK

Factor

Currency

ESG

Fixed Income The FTSE UK Index Series provides investors with a comprehensive
and complementary set of market-cap weighted indexes measuring
the performance of all capital and industry segments of the UK
Industry Specific equity market traded on the London Stock Exchange (LSE).

30 FTSE Russell
FTSE 100 The UK’s primary blue chip benchmark, the FTSE 100 comprises the 100
most highly capitalized companies listed on London Stock Exchange.

FTSE All-Share The FTSE All-Share Index is considered the best performance measure of the
London equity market, with the vast majority of UK-focused money invested
in funds which track it. The FTSE All-Share Index represents the performance
of all eligible companies listed on the London Stock Exchange’s (LSE) main
market, which pass screening for size and liquidity. The index captures 98% of
the UK’s market capitalization.

FTSE 250 The FTSE 250 Index comprises mid-cap companies not covered by the FTSE
100, and represents approximately 15% of UK market capitalization.

FTSE 350 The FTSE 350 Index represents large and mid cap stocks traded on the
London Stock Exchange (LSE), which pass screening for size and liquidity.
The FTSE 350 index is made up of the constituents of the FTSE 100 and FTSE
250 indexes.

FTSE AIM The FTSE AIM Index Series was developed in conjunction with the London
Stock Exchange in order to improve the transparency, liquidity and profile of
the AIM Market , extending the range of available investment opportunities.

Guide to products & services 31

Market Cap Weighted Market Cap Weighted
Alternatively Weighted
EMEA

Factor

Currency

ESG

Fixed Income

Industry Specific

32 FTSE Russell
FTSE Italia The FTSE Italia Index Series provides investors with a comprehensive
and complementary set of market-cap weighted indexes measuring the
performance of Italian companies listed on the MTA and MIV markets of
Borsa Italia. The series includes the FTSE MIB Index, the primary benchmark
index for the Italian equity market.

FTSEurofirst The FTSEurofirst Index Series is a joint product of FTSE and Euronext. The
series provides a range of liquid and transparent pan-European and Eurozone
indexes, which track equity performance across the region as a whole, and
across 18 industry sectors. Headline indexes include:
• FTSEurofirst 80 Index - comprises the 60 largest companies ranked
by market capitalization in the FTSE Eurozone Index and 20 additional
companies selected for their size and sector representation.
• FTSEurofirst 100 Index - comprises the 60 largest companies ranked
by market capitalization in the FTSE Developed Europe Index and 40
additional companies selected for their size and sector representation.
• FTSEurofirst 300 Index - comprises the 300 largest companies ranked
by market capitalization in the FTSE Developed Europe Index.

FTSE/JSE Africa Developed in partnership with Johannesburg Stock Exchange (JSE), the
FTSE/JSE Africa Index Series is designed to represent the performance
of Southern African companies, providing market participants with a
comprehensive and complementary set of indexes, which measure the
performance of the major capital and industry segments of the Southern
African market. The series allows market participants to track by market
capitalization, sector and alternative weighting methodologies such as
equal weighting.

Guide to products & services 33

FTSE ASEA Pan Africa The FTSE ASEA Pan Africa Index Series represents the performance of
eligible securities listed on ASEA (African Securities Exchanges Association)
member exchanges. The index series was designed after extensive market
consultation to meet the needs of African market participants, and it is
suitable for benchmarking purposes and as a tool to be used in the creation of
index-linked funds and other investment products.

FTSE Russia IOB The FTSE Russia IOB Index is a market-cap weighted index designed
to measure the performance of the 15 biggest and most liquid Russian
companies trading on the London Stock Exchange’s International Order
Book (IOB) in the form of Russian Depositary Receipts (RDRs). The IOB
captures the pricing of these Russian investment vehicles that are either
listed or trading over-the-counter (OTC). Depositary Receipts are negotiable
certificates representing ownership of a given number of a company’s shares,
which can be listed and traded independently from the underlying securities.

34 FTSE Russell
Guide to products & services 35
Market Cap Weighted Market Cap Weighted
Alternatively Weighted
Asia

Factor

Currency

ESG

Fixed Income

Industry Specific

36 FTSE Russell
FTSE ASEAN The FTSE ASEAN Index Series represents stocks from the seven leading
ASEAN financial markets: Bursa Malaysia, Hanoi Stock Exchange, Ho Chi
Minh Exchange, Indonesia Stock Exchange, The Philippine Stock Exchange,
Singapore Stock Exchange and the Stock Exchange of Thailand. Its coverage
includes large, mid and small cap constituents listed on the seven exchanges
that make up the ASEAN partnership. The majority of the indexes can be
used as tools for the creation of index tracking funds, derivatives and as
a performance benchmark. The FTSE ASEAN Stars Index is intended as a
barometer and not to be used as the basis for investment products.

FTSE ASFA Australia FTSE partnered with ASFA, the industry body that represents all aspects
of the Australian superannuation industry in 2009, to provide Australian
superannuation funds, fund managers and other stakeholders with industry
standard after-tax benchmarks. These benchmarks were developed
specifically to assist the industry’s transition to after-tax performance
measurement and reporting. The structure of the series enables
superannuation funds to select the after-tax benchmark that best suits
their requirements, whether it’s franking credits, participation in off-market
buy-backs, capital gains tax, or all three. The series includes both non tax-
adjusted indexes and tax-adjusted indexes.

Guide to products & services 37

FTSE Asiatop & Asian Sector The FTSE Asiatop and FTSE Asian Sector Index Series are designed to
represent the performance of companies listed on the regional exchanges
shown below either by market capitalization or by sector. The series includes
the FTSE Asiatop Index, the FTSE Asiatop Capped Index and the FTSE Asian
Sector Index Series and provides market participants with a range of tools
suitable for use in the creation of both on-exchange and over-the-counter
(OTC) derivative products, mutual funds and exchange traded funds (ETFs).
• China (Red Chips, P Chips, H Shares and B Shares)
• Hong Kong (Hong Kong stocks and HSBC)
• Indonesia
• India
• Malaysia
• The Philippines
• Singapore
• South Korea
• Taiwan
• Thailand

FTSE Bursa Malaysia The FTSE Bursa Malaysia Index Series covers all eligible companies listed on
the Bursa Malaysia Main and ACE Markets. The indexes include the market’s
headline FTSE Bursa Malaysia KLCI and the FTSE4Good Bursa Malaysia Index,
and are designed to measure the performance of the major capital segments
of the Malaysian market, dividing it into large, mid, small cap, fledgling and
Shariah-compliant series.

38 FTSE Russell
FTSE China The FTSE China Index Series provides investors with a comprehensive and
complementary set of indexes representing all the main China share classes
(including A Shares, B Shares, H Shares, Red Chips, P Chips, S Chips,
N Shares), company sizes, sectors and themes. The breadth and depth of
China coverage enables the various share classes be combined and dissected
for analysis and benchmarking purposes to suit any domestic or
international mandate.

Index families in the FTSE China Index Series include:

• FTSE China Share Class Indexes – these are indexes that focus on a
specific Chinese share class:
FTSE China A 50 Index
FTSE China A All Cap Index
FTSE China H Share All Cap Index
FTSE China B Share All Cap Index
FTSE China Red Chip All Cap Index
FTSE China P Chip All Cap Index
FTSE China S Chip All Cap Index
FTSE China N Share All Cap Index
• FTSE China Composite Indexes – these are various indexes that
combine 2 or more China share classes:
FTSE China 50 Index (H Shares, Red Chips, and P Chips)
FTSE China All Cap Index (H Shares, B Shares, Red Chips and P Chips)
FTSE China Overseas All Cap Index (S Chips and N Shares)
FTSE China International All Cap Index (H Shares, B Shares, Red Chips,
P Chips, S Chips and N Shares)

Guide to products & services 39

Straits Times and FTSE ST FTSE in partnership with Singapore Press Holdings (SPH) and the Singapore
Exchange (SGX) jointly manages the Singapore stock market’s main
benchmark, the Straits Times Index (STI), to create and calculate a broad
series of indexes for the Singapore market representing various sized
companies, sectors and themes. The series includes the Straits Times Index
(STI), FTSE ST All Share Index, FTSE ST Large & Mid Cap Index, FTSE ST Mid
Cap Index and the FTSE ST Small Cap Index.

Russell/Nomura (Japan) In 1995, analysts at Russell and the Financial & Economic Research Center
of Nomura Securities Co., Ltd., joined forces to meet a critical need for
Japanese equity investors. They created a series of indexes that provided a
comprehensive benchmark of the market, and were the first Japanese equity
indexes to provide both style and float adjustments. Each Russell/Nomura
index accurately reflects the Japanese equity investable universe, providing a
precise picture of the opportunity set.

FTSE TWSE Taiwan The FTSE TWSE Taiwan Index Series is a joint venture between the Taiwan
Stock Exchange Corporation (TWSE) and FTSE Group (FTSE) to provide
market participants with a range of tools to gain exposure to the Taiwanese
market. The series includes the FTSE TWSE Taiwan 50 Index, the FTSE TWSE
Taiwan Technology Index, the FTSE TWSE Taiwan Dividend+ Index, the FTSE
TWSE RAFI Taiwan Index Series, and the FTSE TWSE Taiwan Shariah Index.

40 FTSE Russell
Guide to products & services 41
 Market Cap Weighted Alternatively
Weighted
Alternatively Weighted

Factor

Currency

Investors are increasingly looking for alternative index

ESG construction approaches to complement existing market-cap
indexes. FTSE Russell has developed a comprehensive range
of alternatively weighted indexes. They are transparent, rules-
Fixed Income
based indexes designed to target specific objectives such as
volatility reduction or improved levels of diversification.
Industry Specific

42 FTSE Russell
Fundamental (FTSE RAFI and Created in collaboration with Research Affiliates, LLC: Index constituents
are weighted using a composite of fundamental factors, including total cash
Russell Fundamental) dividends, free cash flow, total sales and book equity value. Prices and market
values are not determinants of the index weights. Consequently the indexes
are less prone to excessive concentration arising from market fads, which can
result in over-exposure to individual companies, sectors or countries.

FTSE RAFI® Low Volatility The FTSE RAFI® Low Volatility Index Series represents a complementary
offering to the existing FTSE RAFI® Index Series by applying the FTSE
RAFI® index methodology to a universe of low volatility securities. Global,
Developed, Emerging and single country indexes are available.

FTSE RAFI® Equity Income The FTSE RAFI® Equity Income Index Series provides new tools for market
participants seeking sustainable yield and is designed to measure the
performance of high yield stocks which have been screened to target
sustainable income. Index constituents are selected and weighted using four
fundamental factors, as opposed to market capitalization.

FTSE Global Minimum Variance The FTSE Global Minimum Variance Index Series aims to deliver reduced
index volatility based on historical return information, thereby offering
an alternative risk reward trade-off within the index while maintaining full
allocation to the relevant equity market. Reduced volatility is achieved by
applying a transparent rules-based approach which minimizes historical
variance, subject to additional constraints on the weight of individual stocks,
industries and countries represented in the index.

Guide to products & services 43

Equal Weighted The FTSE UK Equally Weighted Indexes are alternatively weighted versions of
their underlying market-cap weighted index. At the regular rebalance, each
(FTSE and Russell) company is given an equal weighting in the index. The weight of companies
between rebalances will move in line with their relative price performance.
Russell Equal Weight Indexes offer a practical and unique index solution for
investors seeking alternative weighting methods. This innovative series
offers an enhancement over traditional equal weight indexes, which apply
the same weight to each security in the index, by providing sector equal
weight exposure.

FTSE GDP Weighted The FTSE GDP Weighted Index Series is designed to reflect the performance
of constituent companies in an index where country weightings are
proportionate to each country’s forecast GDP.

FTSE EDHEC The FTSE EDHEC-Risk Efficient Index Series was launched in association
with EDHEC-Risk Institute (EDHEC-Risk). Based on constituents in
the FTSE All-World Index Series, the indexes attempt to improve the risk/
reward trade-off available in the underlying benchmark index. Constituents’
weights result from EDHEC-Risk’s portfolio optimization technique, which
targets improvements in efficiency for a broad market index by maximizing
the Sharpe ratio.

44 FTSE Russell
FTSE Global Equal Risk The FTSE Global Equal Risk Contribution Index Series is designed to monitor
the performance of a portfolio consisting of securities that are weighted such
Contribution (ERC) that each large cap security contributes equally to overall portfolio risk.

Russell Geographic Exposure The Russell Geographic Exposure (“GeoExposure”) Index Series is a modified
market-cap weighted index series designed to track the performance
of companies with significant exposure to targeted geographic regions
or countries. These indexes provide clients with deeper insight into a
company’s performance, risks and growth opportunities through knowledge
of its geographic market and economic exposures as determined by the
geographic breakdown of its revenue.

Russell High Efficiency™ Defensive The Russell High Efficiency Defensive Indexes are designed to deliver an
efficient, transparent, and turnover-controlled capture of the Low Volatility
Indexes® (HEDI) and Quality variables from the Russell Stability Indexes at various levels of
tracking error. These indexes offer a non cap-weighted implementation of
the Russell Defensive Index. In addition, the indexes are the first and only
series of indexes to offer target tracking error to the industry leading Russell
benchmarks, a key benefit to pension plans, foundations and endowments.

Guide to products & services 45

 Market Cap Weighted Factor
Alternatively Weighted

Illiquidity Momentum Quality Size

Factor

Currency Value Volatility Yield

ESG

Fixed Income

Industry Specific

46 FTSE Russell
FTSE Global Factor The FTSE Global Factor Index Series is a suite of benchmarks designed to
represent the performance of specific factor characteristics, with seven
single factor indexes and additional combinations of factors comprising the
index series. The seven factors represent common factor characteristics for
which there is a broad academic and practitioner consensus, supported by a
body of empirical evidence across different geographies and time periods.
• Illiquidity
• Momentum
• Quality
• Size
• Value
• Volatility
• Yield
The indexes are based on the market-cap weighted FTSE Developed
and FTSE Emerging indexes. The FTSE Global Factor Index Series uses a
transparent methodology to achieve a controlled exposure to a target factor,
while considering levels of diversification and capacity.

Guide to products & services 47

 Market Cap Weighted Currency
Alternatively Weighted

Factor

Currency

ESG

Fixed Income

Industry Specific

48 FTSE Russell
FTSE World Parity FTSE World Parity Unit (WPU) is a currency unit comprising a basket of
developed currencies, emerging currencies and storable commodities.
Unit (WPU) FTSE WPU represents an exchange rate between the basket of currencies/
commodities and the US Dollar, providing an index facility to manage
currency risks arising from exchange rate fluctuation and the erosion of
purchasing power.

FTSE Cürex FX The FTSE Cürex FX Index Series is a series of independent benchmark
indexes for institutional foreign exchange participants, executable in real-
time 24/5. Based on multiple price inputs from major institutional FX liquidity
providers, the FTSE Cürex FX Index Series is rules-based and published in
real-time from 17:00 ET Sunday to 17:00 ET Friday. Additionally, a ‘Snap’ index
is published every 15 minutes.
The index series is designed to link institutional FX to global capital markets
via executable Bid and Offer indexes for over 200 currency pairs (FTSE Cürex
FIX) and 8 benchmark currency baskets.

Guide to products & services 49

FTSE Currency Forward The FTSE Currency Forward Rate Bias (FRB) Index Series is created in
Rate Bias (FRB) partnership with Record Currency Management and is designed to capture
the return generated from a defined set of equally-weighted currency pairs.
This return is attributable to the Forward Rate Bias (FRB), also known as
“carry”, in the currency markets. The series aims to offer a diversification
option outside of traditional equity and fixed income indexes.
• The FTSE Currency FRB5 Indexes consist of ten currency pairs that can
be created from the five most widely-traded currencies – US Dollar,
Euro, Japanese Yen, Pound Sterling and Swiss Franc.
• The FRB10 Indexes consist of 45 currency pairs and introduces a
further five currencies to those already featured in the FRB5 Indexes.
The additional currencies are Australian Dollar, Canadian Dollar, New
Zealand Dollar, Norwegian Krone and Swedish Krona.
The FRB indexes can be used as tools for index-tracking management and for
benchmarking purposes.

50 FTSE Russell
Guide to products & services 51
 Market Cap Weighted ESG
Alternatively Weighted

Factor

Currency

FTSE Russell has played a significant role in shaping and growing

ESG the responsible investment (RI) market since the launch of our
FTSE4Good® Index Series in 2001. Since then we have developed
a portfolio of RI indexes and data tools designed to support the
Fixed Income
inclusion of ESG (environmental, social and governance) factors in
investment decision-making.
Industry Specific

52 FTSE Russell
FTSE4Good The FTSE4Good Index Series measures the performance of companies that
meet globally recognized corporate responsibility standards and facilities
inves tment in those companies. The following FTSE4Good Indexes are
available: Global, Global 100, UK, UK 50, Europe, Europe 50, US, US 100,
Japan, Australia 30, IBEX (Spain) and the Environmental Leaders Europe 40.

FTSE4Good ESG Ratings The ESG Ratings cover over 2,400 securities in the FTSE All-World Developed
Index based on a transparent and consistent methodology that measures
risk and performance across a variety of ESG areas. A flexible risk relative
scoring method is used, tailoring a company’s risk in relation to each theme
rather than taking a generic or sector only approach. The ESG Ratings
offer an objective and flexible service for asset owners, asset managers
and consultants to integrate ESG considerations into investments and
stewardship approaches. The Ratings can be used in a variety of ways,
building a basis for active portfolio management, company engagement,
customized indexes, ESG risk analysis or research and analysis.

FTSE Environmental Markets The FTSE Environmental Markets Index Series, in collaboration with IMPAX
Asset Management, measures the performance of companies globally
that have significant involvement in environmental technology and related
business activities including renewable and alternative energy, energy
efficiency, water technology and waste and pollution control.

FTSE All-World ex Fossil Fuels The FTSE All-World ex Fossil Fuels Index Series is a capitalization-weighted
index designed to represent the performance of constituents of the FTSE
All-World Index after the exclusion of companies that have a certain revenue
and/or reserve exposure to fossil fuels.

Guide to products & services 53

 Market Cap Weighted Fixed Income
Alternatively Weighted

Factor

Currency

ESG

Fixed Income

Industry Specific

54 FTSE Russell
FTSE MTS The FTSE MTS Indexes (EuroMTS) are the first independent total return
indexes measuring the performance of the largest and most widely-traded
securities in the eurobond market. The availability of executable bond prices
from the underlying MTS market enables FTSE MTS Indexes to offer a level of
transparency and replicability that is unique in the bond markets.

FTSE TMX Canada FTSE TMX Global Debt Capital Markets (formerly PC-Bond/DEX) is the
predominant provider of fixed income indexes in Canada, best known for the
Universe Bond Index. The FTSE TMX Canada Indexes are used as benchmarks
for approximately US $2 trillion in assets globally, invested across ETFs,
mutual funds and segregated mandates.

FTSE Actuaries UK Gilts The FTSE Actuaries UK Gilts Index Series is a comprehensive family of
indexes and related bond data (e.g. yield, duration, convexity) covering the
conventional Gilt and index-linked Gilt markets. The indexes are the premier
benchmarks for eligible British Government Securities. There are headline
indexes and sub-indexes available for a wide range of maturity bands.
Additionally, there is a yield index that provides the term structure of the Gilt
market from one year up to 50 years.

FTSE ASFA Australia Bond The FTSE ASFA Australia Bond Index Series is designed to measure the
performance of the domestic Australian Dollar (AUD) denominated bond
market, covering government, semi government and corporate bonds.

Guide to products & services 55

FTSE-BOCHK Offshore RMB Bond The FTSE-BOCHK Offshore RMB Bond Index Series measures the
performance of RMB-denominated bonds issued and settled outside the
People’s Republic of China.

FTSE China Onshore Bond The FTSE China Onshore Bond Index Series measures the performance
of RMB-denominated bonds issued and settled in the People’s Republic of
China. The series is designed to provide an international industry standard
benchmark and to offer an indexing tool to market participants seeking
exposure to RMB-denominated bonds.

56 FTSE Russell
Guide to products & services 57
 Market Cap Weighted Industry Specific
Alternatively Weighted

Factor

Currency

ESG

Fixed Income

Industry Specific

58 FTSE Russell
FTSE EPRA/NAREIT The FTSE EPRA/NAREIT Global Real Estate Index Series is designed to
represent general trends in eligible real estate equities worldwide. Relevant
Global Real Estate activities are defined as the ownership, disposal and development of income-
producing real estate. The series includes a range of regional and country
indexes, Emerging Market indexes, Dividend+ indexes, Global Sectors,
Investment Focus and Real Estate Invest Trust (REITs) and Non-REITs series.

FTSE NAREIT US Real Estate The FTSE NAREIT US Real Estate Index Series presents users with
a comprehensive family of REIT performance indexes that span the
commercial real estate space across the U.S. economy, offering index
exposure to all investment and property sectors. In addition, the more
narrowly focused property sector and sub-sector indexes provide the facility
to concentrate commercial real estate exposure in more selected markets.

FTSE NAREIT Preferred Stock The FTSE NAREIT Preferred Stock Index is designed to measure the
performance of all publicly-tradable, non-convertible, perpetual preferred
stocks that meet a minimum size requirement of US $50 million in face value,
issued by companies that are members of the FTSE NAREIT All REITs Index.
The index is calculated on a market capitalization weighted basis with capping
to avoid single-issuer concentration.

Guide to products & services 59

FTSE NAREIT PureProperty® The FTSE NAREIT PureProperty® Index Series is designed to reflect the
performance of the specific regional and property type characteristics of
REITs.
The series consists of two sets of indexes:
• The FTSE NAREIT PureProperty® Index Series represents the
unleveraged performance of the underlying real estate assets owned by
constituent REITs.
• The FTSE NAREIT PureProperty® Equity Index Series represents the
performance of constituent REITs and consequently incorporates the
effects of leverage employed by constituent REITs.

FTSE Infrastructure The FTSE Infrastructure Index Series is a comprehensive set of indexes
designed to reflect the performance of listed infrastructure and
infrastructure-related securities worldwide. The series includes the FTSE
Core Infrastructure Index, FTSE Core Infrastructure 50/50 Index, and the
FTSE Infrastructure Opportunities Index. The FTSE Infrastructure Index
Series uses a building block approach to give market participants greater
choice and flexibility in the way they can benchmark, research and manage
their exposure to listed global infrastructure.

60 FTSE Russell
Guide to products & services 61
ETFs and
derivatives

62 FTSE Russell
Investors and traders can choose from a wide variety
of investable products based on the perspective and
methodology of FTSE Russell indexes. Passively-managed
funds, futures and options products are not distributed
by FTSE Russell, but are available from other institutions.
Exchange-traded funds (ETFs) are distributed by
FTSE Russell licensees as well as other institutions.

Guide to products & services 63

FTSE Russell calculates
tradable indexes across
Countries Sector Size Regions
all asset classes. Issuers
can leverage our building
block approach to index
development to select from a
broad range of asset classes, Equities Fixed Income Multi-Asset REITs
weighting schemes and
screening criteria to obtain
a tradable index that meets
their needs.
ESG &
Infrastructure Factors Smart Beta Shariah

Currency Hedged Capped Tax Adjusted

64 FTSE Russell
By using a FTSE Russell index based product, investors can
be confident in the quality of the underlying index. Investors
and traders can learn more about investing in or trading
these products from the financial institutions or the various
exchanges that sell them.

Passively-managed Futures and ETFs

funds based on the options Exchange-traded funds (ETFs) based on
FTSE Russell indexes These tradable solutions based on FTSE
FTSE Russell indexes are designed to
offer focused, transparent and consistent
Russell indexes provide investors with exposure to a growing number of
Many of the largest financial institutions
instant and often leveraged exposure investment categories and disciplines.
around the world offer passively-
to the performance of an asset class or ETFs based on FTSE Russell indexes
managed index funds based on the FTSE
category in a single trade. leverage the perspective and precision of
Russell indexes. These index-based
mutual funds are available to both the underlying index. Tracking both core
institutional and individual investors, global equity and strategic indexes, there
directly from these fund management are a growing number of FTSE Russell
organizations. indexes ETF solutions on the market.

Guide to products & services 65

To learn more, visit ftserussell.com; email [email protected]; or call your regional Client Service
Team office:
EMEA North America Asia-Pacific
+44 (0) 20 7866 1810 +1 877 503 6437 Hong Kong +852 2164 3333
Tokyo +81 3 3581 2764
Sydney +61 (0) 2 8823 3521

© 2016 London Stock Exchange Group plc and its applicable group undertakings (the “LSE Group”). The LSE Group includes (1) FTSE
International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE TMX Global Debt Capital Markets Inc. and FTSE TMX Global Debt
Capital Markets Limited (together, “FTSE TMX”) and (4) MTSNext Limited (“MTSNext”). All rights reserved.
FTSE Russell® is a trading name of FTSE, Russell, FTSE TMX and MTS Next Limited. “FTSE®”, “Russell®”, “FTSE Russell®” “MTS®”, “FTSE
TMX®”, “FTSE4Good®” and “ICB®” and all other trademarks and service marks used herein (whether registered or unregistered) are trade
marks and/or service marks owned or licensed by the applicable member of the LSE Group or their respective licensors and are owned, or used
under licence, by FTSE, Russell, MTSNext, or FTSE TMX.
All information is provided for information purposes only. Every effort is made to ensure that all information given in this publication is accurate,
but no responsibility or liability can be accepted by any member of the LSE Group nor their respective directors, officers, employees, partners
or licensors for any errors or for any loss from use of this publication or any of the information or data contained herein.
No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or
representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Russell Indexes or the fitness
or suitability of the Indexes for any particular purpose to which they might be put.
No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing
in this document should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors,
officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in
any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index
is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without
obtaining specific legal, tax, and investment advice from a licensed professional.
No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise, without prior written permission of the applicable member of the LSE Group. Use and distribution of
the LSE Group index data and the use of their data to create financial products require a licence from FTSE, Russell, FTSE TMX, MTSNext and/
or their respective licensors.

66 FTSE Russell