CONSULTATION ON ENHANCEMENT TO
THE MSCI TOP 50 DIVIDEND INDEXESMETHODOLOGY
September 2017

This consultation may or may not lead to the adoption of any or
all of the proposals contained in this presentation© 2017 MSCI Inc. All rights reserved.
Please refer to the disclaimer at the end of this document.

OVERVIEW
 MSCI is consulting clients on the proposed changes to the MSCI Top 50 Dividend
Indexes methodology
 This document highlights proposed changes to the current methodology toensure that no more than a single security per issuer is included in the Indexes This document presents a simulated snapshot (1st September 2017 for MSCIEAFE Top 50 Dividend Index) wherein the current holdings of MSCI EAFE Top 50
Dividend Index are used to illustrate the impact on constituents of the Index due
to the proposed changes
 This consultation may or may not lead to the adoption of any or all of the
proposals contained in this presentation

2

PROPOSED INDEX METHODOLOGYParameters
Eligible Securities
Annual Index Review (AIR)
ScreenMSCI Top 50 Dividend Indexes Methodology (Proposed)
Constituents in the parent Indexes : MSCI EAFE Index or MSCI EM Index
Addition Criteria *Retention Criteria
5% <= Dividend Yield <= 20%
Dividend Yield >= 3%
1-year DPS growth rate >= 0
1-year DPS growth rate >= 0
1-year DPS growth rate between 0% and (-)10% andPayout ratio higher compared to previous year

Quarterly Index Review(QIR) Screen

Last 12 months’ Price return not in the bottom 5th
percentile relative to the constituents in Parent
index
Addition Criteria **Weights
Capping

Retention Criteria
5% <= Dividend Yield <= 20%
Dividend Yield >= 3%
1-year DPS growth rate >= 0
1-year DPS growth rate >= 0
1-year DPS growth rate between 0% and (-)10%, Payout
ratio higher compared to previous year
• A fixed number of securities (50) having highest Dividend Yield are selected• No more than a single security per issuer is to be selected in the index, subject to all otherconstraints. Securities with the same issuer, are given preference for selection into the Index indecreasing order of Dividend Yield.
Equal Weighting (for new securities added in QIR) and for all securities in AIR
35% on sectors and countries (first sector weights to be checked followed by that of country)

Index Reviews

Annual Index Review in May and Quarterly Index reviews in August, November and February

Security Selection

Note : Text highlighted in red is the proposed change in methodology* Note : The existing securities in the Index are given preference and then additional securities are selected from the parent index in order of decreasing dividend yield , conditional on sector& country capping.
** Note : If resulting number of securities is less than 50, additional securities are selected from the parent index in order of decreasing dividend yield, conditional on sector and country
capping.

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MSCI EAFE TOP 50 DIVIDEND INDEX : CURRENTSNAPSHOT AS OF SEP 1, 2017








On Sep 1 2017, MSCI EAFE Top 50
Dividend Index had 2 sets of paired
securities with same issuer - Intesa
Sanpaolo and Royal Dutch Shell had
two securities each
MSCI proposes to have a maximumof one security per issuer. Securities
are given preference for selection
into the Index in decreasing order ofDividend Yield, in case there are
multiple securities for that issuer
Securities highlighted in red havelower Dividend Yield compared tothe ones highlighted in blue for thesame issuer - hence only securities
highlighted in blue would be a part ofthe index
As of Sep 1 2017, MSCI EM Top 50
Dividend Index had no 2 securities
with the same issuer#

Isin CodeDividend
Yield

Security Short NameCountry Name

GICS Code Sector

1 FI0009007132

FORTUM CORPFINLAND

55101010 Uti l i ti es

7.96

2 GB0006776081

PEARSON

UNITED KINGDOM

25401040 Cons umer Di s creti ons ary

7.91

3 AU000000TLS2TELSTRA CORP

AUSTRALIA

50101020 Tel ecommuni cati on s ervi ces

7.56

4 FR0010208488

ENGIE

FRANCE

55103010 Uti l i ti es

7.35

5 AU000000HVN7HARVEY NORMAN HOLDINGSAUSTRALIA

25503020 Cons umer Di s creti ons ary

7.09

6 IT0000072626

INTESA SANPAOLO RNC

ITALY

40101010 Fi nanci al s

7.00

7 NO0003054108

MARINE HARVESTNORWAY

30202030 Cons umer Stapl es

6.96

8 SG1V12936232

STARHUBSINGAPORE

50102010 Tel ecommuni cati on s ervi ces

6.96

9 GB0007980591

BP

UNITED KINGDOM

10102010 Energy

6.81

10 LU0088087324

SES A-FDR

FRANCE

25401025 Cons umer Di s creti ons ary

6.74

11 GB00B03MLX29

ROYAL DUTCH SHELL A

UNITED KINGDOM

10102010 Energy

6.69

12 ES0130670112

ENDESA

SPAIN

55101010 Uti l i ti es

6.66

13 GB00B03MM408

ROYAL DUTCH SHELL B

UNITED KINGDOM

10102010 Energy

6.63

14 GB0007908733

SSE

UNITED KINGDOM

55101010 Uti l i ti es

6.62

15 AU000000NAB4

NATIONAL AUSTRALIA BANKAUSTRALIA

40101010 Fi nanci al s

6.61

16 GB00BY9D0Y18

DIRECT LINE INS GRPUNITED KINGDOM

40301040 Fi nanci al s

6.57

17 HK0008011667

PCCW

HONG KONG

50101020 Tel ecommuni cati on s ervi ces

6.44

18 PTEDP0AM0009

EDP ENERGIAS DE PORTUGALPORTUGAL

55101010 Uti l i ti es

6.33

19 GB0008782301

TAYLOR WIMPEY

UNITED KINGDOM

25201030 Cons umer Di s creti ons ary

6.31

20 AU000000BOQ8

BANK OF QUEENSLAND

AUSTRALIA

40101015 Fi nanci al s

6.31

21 GB0032089863

NEXT

UNITED KINGDOM

25503010 Cons umer Di s creti ons ary

6.28

22 IT0003796171

POSTE ITALIANE

ITALY

40301020 Fi nanci al s

6.27

23 SE0000242455

SWEDBANKSWEDEN

40101010 Fi nanci al s

6.26

24 AU000000BEN6BENDIGO & ADELAIDE BANKAUSTRALIA

40101015 Fi nanci al s

6.12

25 IT0000072618

INTESA SANPAOLO

ITALY

40101010 Fi nanci al s

6.11

26 SE0000427361

NORDEA BANKSWEDEN

40101010 Fi nanci al s

6.08

27 LU0061462528

RTL GROUP(NEW)GERMANY

25401020 Cons umer Di s creti ons ary

6.08

28 FR0000125585

CASINOFRANCE

30101030 Cons umer Stapl es

6.05

29 HK0000093390

HKT TRUST AND HKTHONG KONG

50101020 Tel ecommuni cati on s ervi ces

6.04

30 GB00BH4HKS39

VODAFONE GROUP

UNITED KINGDOM

50102010 Tel ecommuni cati on s ervi ces

5.95

31 NZTELE0001S4SPARK NEW ZEALANDNEW ZEALAND

50101020 Tel ecommuni cati on s ervi ces

5.87

32 SG1M77906915

ASCENDAS REITSINGAPORE

60101020 Real Es tate

5.83

33 CH0011075394

ZURICH INSURANCE GROUPSWITZERLAND

40301030 Fi nanci al s

5.77

34 FR0000120271

TOTAL

FRANCE

10102010 Energy

5.73

35 AU000000FMG4FORTESCUE METALS GROUP

AUSTRALIA

15104050 Materi al s

5.57

36 FR0000035081

ICADE

FRANCE

60101010 Real Es tate

5.51

37 KYG7800X1079

SANDS CHINA

HONG KONG

25301010 Cons umer Di s creti ons ary

5.49

38 SE0005190238

TELE2 B

SWEDEN

50102010 Tel ecommuni cati on s ervi ces

5.44

39 HK0000179108

HK ELECTRIC INVESTMENTS

HONG KONG

55101010 Uti l i ti es

5.40

40 GB0006825383

PERSIMMON

UNITED KINGDOM

25201030 Cons umer Di s creti ons ary

5.39

41 SE0000148884

SKAND.ENSKILDA BANKEN A

SWEDEN

40101010 Fi nanci al s

5.38

42 AU000000AZJ1AURIZON HOLDINGSAUSTRALIA

20304010 Indus tri al s

5.36

43 GB0005603997

LEGAL & GENERAL GROUP

UNITED KINGDOM

40301020 Fi nanci al s

5.35

44 GB00B02L3W35

BERKELEY GRP HLDGS UNIT

UNITED KINGDOM

25201030 Cons umer Di s creti ons ary

5.30

45 IT0003153415

SNAM

ITALY

10102040 Energy

5.26

46 GB0005405286

HSBC HOLDINGS (GB)UNITED KINGDOM

40101010 Fi nanci al s

5.11

47 ES0113211835

BBVA

SPAIN

40101010 Fi nanci al s

4.84

48 FR0000130213

LAGARDERE

FRANCE

25401040 Cons umer Di s creti ons ary

4.68

49 NL0011821202

ING GROEPNETHERLANDS

40101010 Fi nanci al s

4.17

50 FR0000045072

CREDIT AGRICOLEFRANCE

40101010 Fi nanci al s

4.04

4

MSCI EAFE TOP 50 DIVIDEND INDEX : SIMULATEDSNAPSHOT REFLECTING PROPOSED CHANGES










Securities
highlighted
inred(previous slide) would not have been
selected due to lower dividends,
while, those in blue would have been
selectedHence, Intesa Sanpaolo and RoyalDutch Shell would have one security
each
Two new securities – Stockland andTabcorp Holdings, highlighted ingreen would have been added as
replacement
The incremental turnover for thischange
would
have
been
approximately 4.1%
We propose to implement thischange in the November Index
Review, subject to implementation
feasibility within this timeline#

Isin Code

GICS CodeDividend
Yield

Security Short NameCountry Name

1 FI0009007132

FORTUM CORPFINLAND

55101010 Uti l i ti es

7.96

2 GB0006776081

PEARSON

UNITED KINGDOM

25401040 Cons umer Di s creti ons ary

7.91

3 AU000000TLS2TELSTRA CORP

AUSTRALIA

50101020 Tel ecommuni cati on s ervi ces

7.56

4 FR0010208488

ENGIE

FRANCE

55103010 Uti l i ti es

7.35

5 AU000000HVN7HARVEY NORMAN HOLDINGSAUSTRALIA

25503020 Cons umer Di s creti ons ary

7.09

6 IT0000072626

INTESA SANPAOLO RNC

ITALY

40101010 Fi nanci al s

7.00

7 NO0003054108

MARINE HARVESTNORWAY

30202030 Cons umer Stapl es

6.96

8 SG1V12936232

STARHUBSINGAPORE

50102010 Tel ecommuni cati on s ervi ces

6.96

9 GB0007980591

SectorBP

UNITED KINGDOM

10102010 Energy

6.81

10 LU0088087324

SES A-FDR

FRANCE

25401025 Cons umer Di s creti ons ary

6.74

11 GB00B03MLX29

ROYAL DUTCH SHELL A

UNITED KINGDOM

10102010 Energy

6.69

12 ES0130670112

ENDESA

SPAIN

55101010 Uti l i ti es

6.66

13 GB0007908733

SSE

UNITED KINGDOM

55101010 Uti l i ti es

6.62

14 AU000000NAB4

NATIONAL AUSTRALIA BANKAUSTRALIA

40101010 Fi nanci al s

6.61

15 GB00BY9D0Y18

DIRECT LINE INS GRPUNITED KINGDOM

40301040 Fi nanci al s

6.57

16 HK0008011667

PCCW

HONG KONG

50101020 Tel ecommuni cati on s ervi ces

6.44

17 PTEDP0AM0009

EDP ENERGIAS DE PORTUGALPORTUGAL

55101010 Uti l i ti es

6.33

18 GB0008782301

TAYLOR WIMPEY

UNITED KINGDOM

25201030 Cons umer Di s creti ons ary

6.31

19 AU000000BOQ8 BANK OF QUEENSLAND

AUSTRALIA

40101015 Fi nanci al s

6.31

20 GB0032089863

NEXT

UNITED KINGDOM

25503010 Cons umer Di s creti ons ary

6.28

21 IT0003796171

POSTE ITALIANE

ITALY

40301020 Fi nanci al s

6.27

22 SE0000242455

SWEDBANKSWEDEN

40101010 Fi nanci al s

6.26

23 AU000000BEN6BENDIGO & ADELAIDE BANKAUSTRALIA

40101015 Fi nanci al s

6.12

24 SE0000427361

NORDEA BANKSWEDEN

40101010 Fi nanci al s

6.08

25 LU0061462528

RTL GROUP(NEW)GERMANY

25401020 Cons umer Di s creti ons ary

6.08

26 AU000000SGP0STOCKLANDAUSTRALIA

60101010 Real Es tate

6.07

27 FR0000125585

CASINOFRANCE

30101030 Cons umer Stapl es

6.05

28 HK0000093390

HKT TRUST AND HKTHONG KONG

50101020 Tel ecommuni cati on s ervi ces

6.04

29 GB00BH4HKS39

VODAFONE GROUP

UNITED KINGDOM

50102010 Tel ecommuni cati on s ervi ces

5.95

30 NZTELE0001S4SPARK NEW ZEALANDNEW ZEALAND

50101020 Tel ecommuni cati on s ervi ces

5.87

31 AU000000TAH8

TABCORP HOLDINGSAUSTRALIA

25301010 Cons umer Di s creti ons ary

5.86

32 SG1M77906915

ASCENDAS REITSINGAPORE

60101020 Real Es tate

5.83

33 CH0011075394

ZURICH INSURANCE GROUPSWITZERLAND

40301030 Fi nanci al s

5.77

34 FR0000120271

TOTAL

FRANCE

10102010 Energy

5.73

35 AU000000FMG4 FORTESCUE METALS GROUP

AUSTRALIA

15104050 Materi al s

5.57

36 FR0000035081

ICADE

FRANCE

60101010 Real Es tate

5.51

37 KYG7800X1079

SANDS CHINA

HONG KONG

25301010 Cons umer Di s creti ons ary

5.49

38 SE0005190238

TELE2 B

SWEDEN

50102010 Tel ecommuni cati on s ervi ces

5.44

39 HK0000179108

HK ELECTRIC INVESTMENTS

HONG KONG

55101010 Uti l i ti es

5.40

40 GB0006825383

PERSIMMON

UNITED KINGDOM

25201030 Cons umer Di s creti ons ary

5.39

41 SE0000148884

SKAND.ENSKILDA BANKEN A

SWEDEN

40101010 Fi nanci al s

5.38

42 AU000000AZJ1AURIZON HOLDINGSAUSTRALIA

20304010 Indus tri al s

5.36

43 GB0005603997

LEGAL & GENERAL GROUP

UNITED KINGDOM

40301020 Fi nanci al s

5.35

44 GB00B02L3W35

BERKELEY GRP HLDGS UNIT

UNITED KINGDOM

25201030 Cons umer Di s creti ons ary

5.30

45 IT0003153415

SNAM

ITALY

10102040 Energy

5.26

46 GB0005405286

HSBC HOLDINGS (GB)UNITED KINGDOM

40101010 Fi nanci al s

5.11

47 ES0113211835

BBVA

SPAIN

40101010 Fi nanci al s

4.84

48 FR0000130213

LAGARDERE

FRANCE

25401040 Cons umer Di s creti ons ary

4.68

49 NL0011821202

ING GROEPNETHERLANDS

40101010 Fi nanci al s

4.17

50 FR0000045072

CREDIT AGRICOLEFRANCE

40101010 Fi nanci al s

4.04

5

DISCUSSION POINTS The current index methodology allows multiple securities with the same issuer
to be included in the Index, as long as it meets the other criteria for inclusion
into the Index.
 The proposed changes in the methodology will ensure that only a maximum of
one security per issuer can be included in the Index.
 In case there are multiple securities for an issuer, securities with higher dividend
yield are given preference for inclusion in the Index.
 What are your views on using dividend yield as the deciding parameter for
security inclusion in case of multiple securities per issuer? Would you preferusing any other metric such as market capitalization or liquidity?

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