Morningstar® Japan ex-REIT
Gender Diversity Tilt Index
SMThe United Nations Sustainable Development Goals
state, “Gender equality is not only a fundamental humanright, but also a necessary foundation for a peaceful,prosperous, and sustainable world.” Societies that tap into
the full potential of their populations are more competitive,
and in the corporate sphere, the same principles hold.
Research has shown that companies committed to robust
gender diversity policy and practice can achieve superior
financial results.

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Built with the data and scoring methodology of Equileap,1
the Morningstar Japan ex-REIT Gender Diversity Tilt
Index is designed to emphasize the stocks of companies
that have strong gender diversity policies embedded in theircorporate culture and that ensure equal opportunities toemployees, irrespective of their gender.
Measuring gender diversity
Equileap assigns companies a Gender Equality Score
based on 19 criteria across four broad categories, which areweighted differently.

• Category A: Gender Balance in Leadership and Workforce• Category B: Equal Compensation and Work-Life Balance• Category C: Policies Promoting Gender Equality• Category D: Commitment, Transparency, and Accountability
Examples of the 19 criteria driving category scoring
include the gender balance of senior management, thegender pay gap, and policies around parental
leave and sexual harassment. Equileap also examines
a company’s legal record, placing companies embroiled
in legal cases involving gender-based violence anddiscrimination on the Alarm Bell List.

Index eligibility
The Morningstar Japan ex-REIT Gender Diversity Tilt Index
derives its constituents from the Morningstar Japan
ex-REIT Index. All companies from the parent index that are
not part of Equileap’s Alarm Bell List are eligible for index
inclusion. Companies are ineligible for index inclusion
for 12 months after initially appearing on the Alarm Bell List.
Portfolio construction
Companies are ranked in descending order by their Equileap
Gender Equality Score and divided into five equally
sized groups by count. The top group (Group 1) includes
companies with the highest scores, and the bottom
group (Group 5) includes companies with the lowest scores.
The tilt factors listed below are then applied by multiplying
the weight of each company in the parent index by thetilt factor to determine its weight in the Morningstar Japan
ex-REIT Gender Diversity Tilt Index. The sector weights
in the index are ensured to be equal to sector weights in thebenchmark index during each reconstitution.
GroupTilt factor %

11.50

21.25

31.00

40.75

50.50

In cases where companies have an equal Gender Equality
Score, additional data points such as promotion andcareer development are used to determine which company
will receive the higher tilt factor. Individual constituent
weights are capped at 5% of the overall index weight.
Index maintenance
The index is reconstituted annually in December
and rebalanced quarterly in March, June, September,and December.

11

Visit https://equileap.com to learn more about Equileap

Morningstar® Japan ex-REIT Gender Diversity Tilt IndexSM

Construction process
Starting universe

Security selection• Morningstar Japan
ex-REIT Index• Includes stocks representing
the top 97% of theinvestable equity market
by market cap• Companies that are partof Equileap’s Alarm Bell List
are ineligible

Portfolio construction• Companies are ranked indescending order by
their Equileap Gender Equality
Score and divided into
five equally sized group• Assign sector neutral weightwith respect to the benchmark• Individual security weights
capped at 5%

Morningstar Japan
ex-REIT Gender
Diversity Tilt Index

About Morningstar Indexes
Morningstar Indexes was built to keep up with the evolving needs of investors—and to be a leading-edge advocate for them. Our rich heritage as atransparent, investor-focused leader in data and research uniquely equips us to support individuals, institutions, wealth managers and advisors in navigating
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for more information.
About Equileap
Equileap is the leading provider of data & insights on gender equality for investors. Launched in 2016, the company's mission is to close the equality gap
in the workforce. Equileap evaluates thousands of companies based on a broad set of gender equality criteria, which include 19 criteria on gender balance inleadership and workforce, gender pay gap and work-life balance, paid parental leave and more. Please visit equileap.com for more information.

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