Nikkei Asia300 Investable Index
Index Guidebook

Nikkei Inc.

・ This document is the index guidebook of Nikkei Asia300 Investable Index
calculated and published from December 11, 2017 by Nikkei Inc. (Nikkei). The
document is drawn up by Nikkei and it would be changed or modified
corresponding to the revision of the index calculation rule etc.
・ Copyright of this document is owned by Nikkei, and any copies, reprints andreproduction of this document are prohibited without the prior approval of Nikkei.
This document is prepared solely for the understanding of the index tha t Nikkei
calculates and publishes, and it is not to be construed as a solicitation or an offer
to buy or sell any securities or related financial instruments.
・ This English document is a translation of the original document dated December
11 2017 in Japanese and may not be an entirely accurate translation of the original
Japanese document. In any case where differences arise between the English
version and the original Japanese version, the original Japanese document willprevail.

(January 2, 2024 version)

GB-A3I-J-20240102

1: Concept
The Nikkei Asia300 Investable Index represents the trends of the growing 300 major
Asian companies. The index is calculated by S&P Dow Jones Indices LLC (hereinafterreferred to as the “S&P DJI”) under the commission by Nikkei.

2: Index Names(Japanese)
Official : 日 経 ア ジ ア 300 イ ン ベ ス タ ブ ル 指 数
Abbreviation : 日 経 ア ジ ア 300i
(English)
Official : Nikkei Asia300 Investable Index
Abbreviation : Nikkei Asia300i

3: Constituents Management(1) General Rule The Nikkei Asia300 Investable Index covers stocks of the following countries andregions (hereinafter referred to as the “Country” or “Countries”) .
China, Hong Kong, Taiwan, South Korea, Indonesia, Malaysia, Philippine s,Singapore, Thailand and India
 The coverage for the Country would be expanded considering the market size andits liquidity etc. in the future.
 The Country each stock belongs to is defined as the place where the headquarterof the company is located.
 China A-shares and ADRs are not included in the coverage for the time being.
 REITs and investment funds and similar instruments are not included in thecoverage.
(2) Periodic Review
The Periodic Review of the index constituents shall be done at the beginning ofJune every year (effective from the beginning of June). The candidates of the new
300 constituents are selected based on the rank orders compiled by the following
steps and the stocks to be added and removed will be determined finally after
applying “Buffer rule”(demonstrated in (2-5) below).
(2-1) Universe
Stocks with market capitalizations (not considering free-float shares, hereinafter
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2referred to as the “Market Cap”) within top 150 places in consecutive three years
for each Country are eligible as the universe for the constituent selection .
To avoid concentration to the financial sector, upper limit to the number offinancial stocks shall be set at 6 for each Country and only 3 stocks can be selectedfrom the same “Industry” under the finance sector.(*)* To curb the impact of trading for the constituent changes, stocks in the financial
sector eligible in the above process but are not in the universe of the previous
Periodic Review shall not be included in the universe unless the 3-year average
Market Caps of this year are more than 10 percent larger than that of thefinancial stock which was in the previous year’s universe.
* Sectors and Industries are based on the GICS (Global Industry Classification
Standard). The financial sector consists of seven industries: Banks, Thrifts &Mortgage Finance, Diversified Financial Services, Consumer Finance, CapitalMarkets, Mortgage Real Estate Investment Trusts (REITs) and Insurance.
Stocks meeting the following threshold shall be removed from the universe.
・ Annual average trading value is less than 0.5 million US dollars in the past oneyear
・ Free-float ratio is less than 10 percent
・ Liabilities in excess of assets in previous fiscal period(2-2) Measure for selection
The measure for selecting the constituents shall be the each rank order ascalculated below.
① Rank the stocks in the universe (2-1) above by 3-year average Market Cap in
the descending order.
② Adjust the rank orders moving up by 30 places for stocks whose 5-year
average sales growth rates are 10 or more percent.
③ Overall rank orders after reflecting ① and ② will be used for the selection
process onwards.
(2-3) Constituent selection
To balance the composition of the each Country, t he constituents are selected in
the following method.
① Select top 20 ranked stocks for each Country (resulting in selecting 200 stocks
in total for 10 Countries).
② From the remaining stocks, select top 100 ranked stocks regardless of theCountries (resulting in 300 stocks in total). For regional diversification, set
an upper limit of 45 (70 for China and Hong Kong together) as the number of
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3stocks for each Country.
(2-4) Exceptional treatment
Any stock categorized into the following will not be selected and the stock with
the next rank order in the same Country will be selected.
① Both parent and subsidiary listed stocks
Parent company will be selected when both of the parent and subsidiarycompanies become candidates above. A company is defined a s “Parent” whena listed company owns 50 or more percent of shares of another company inthe same Country (China and Hong Kong are recognized in the same Country).
② Stocks hardly tradable
Stocks which are hardly traded will not be selected, e.g. stocks und er thetrading halt in the significant length of time, under the severe foreign
ownership control.
(2-5) Buffer rule
To control the number of constituents to change, following “buffer rule” shall beapplied in the selection process, which is based on the differences of the rank orders .
Of the 300 stocks selected in the above process, those which are not i n the current
constituents are “Candidates to A dd”, while the current constituents not selected as
the 300 stocks are “Candidates to R emove”. Comparing the both Candidates, theconstituent changes will be conducted only if the differences of the rank orders are
50 places or more.
To satisfy the lower limit of 20 stocks for each Country (such country ishereinafter referred to as the “Lower Limit Country“) and the upper limit of 45
stocks for a Country and 70 stocks for China and Hong Kong together (such countryis hereinafter referred to as the “Upper Limit Country”), each Candidate isevaluated as follows.
① If a Candidate to Remove belongs to a Lower Limit Country, compar e theoverall rank order of such Candidate with the highest ranked Candidate to Addin the Country. The constituents are changed if the difference in the rank orderis 50 or more.
② If a Candidate to Remove belongs to an Upper Limit Country, compar e theoverall rank order of such Candidate with the highest ranked Candidate to Add
in the Country or Non-Upper Limit Country. The constituents are changed ifthe difference in the rank order is 50 or more.
③ If a Candidate to Remove belongs neither to Lower Limit Country nor Upper
Limit Country, compare the overall rank order of such Candidate with highestCopyright © Nikkei Inc. All rights reserved.

4

ranked Candidate to Add in the Non- Upper Limit Country. The constituentsare changed if the difference in the rank order is 50 or more.
For the stocks removed from the index between the Periodic Reviews and thecurrent constituents not selected in the universe , the lowest overall rank order isassigned in the process above.
(2-6) Definitions and the base date of the indicators in the Measure① 3-year average Market Cap uses the average of Market Caps at the end ofMarch in the last three years② Daily average trading value uses US dollar based daily averag e of trading
values from April in the last year to March in the current year
③ Free float ratio uses Investable Weight Factor provided by S&P DJI④ Liabilities in excess of assets determine based on the figures in the previous
fiscal period⑤ 5-year average growth rate of sales is the sales in the accounting period ending
in the previous calendar year divided by that in five years earlier(3) Extraordinary removals
If a constituent becomes practically non-tradable, e.g. delisting or the trading
halt for an extended length of time(*), such constituents will be removed from theindex after the announcement. Replacement will not be done for such a removal inprinciple, and the number of the constituents wil l be back to 300 at the following
Periodic Review.
(*) In case the trading of a constituent is halted for 60 consecutive business daysor more on the exchange where the stock is listed as of the end of February, May,
August or November, the constituent will be excluded on the third Friday of thefollowing month (March, June, September or December) in principle.

4: Index Calculation(1) Basic Points
 The indices are calculated based on the free -float adjusted market value method.
 The indices are calculated every 15 seconds during the trading hours of themarkets on which the constituents are listed.
 The indices denominated in the US dollar and the Japanese yen are calculated.
 The Reuters' spot FX rates at the time of calculation are used for the currency
conversions.
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5 If the stock prices are not available due t o trading halt or zero trading volume,the prices used to calculate the previous day closing indices are used. If the stock
goes ex-right during the period, the prices are ex -right adjusted.
 Same as above when one or more exchanges do not trade due to holiday orotherwise.
 For China stocks, the prices of H-share are used in principle.
 The commencement date of the calculation is December 11th 2017. The base dateis December 1, 2015 and the base value is 1,000.
(2) Calculation Calendar
In principle, the indices are calculated from Monday to Friday except on January
1. However, the indices will not be calculated when all of the relevant exchanges
are closed.
(3) Formula An index at a time of 𝑡 is calculated with the following formula.
𝐼𝑛𝑑𝑒𝑥𝑡 ＝𝑆𝑢𝑚 𝑜𝑓 𝐹𝑟𝑒𝑒 𝐹𝑙𝑜𝑎𝑡 𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝 𝑜𝑓 𝐶𝑜𝑛𝑠𝑡𝑖𝑡𝑢𝑒𝑛𝑡𝑠𝑡
× 1,000
𝐷𝑖𝑣𝑖𝑠𝑜𝑟𝑡𝑁

𝑆𝑢𝑚 𝑜𝑓 𝐹𝑟𝑒𝑒 𝐹𝑙𝑜𝑎𝑡 𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝 𝑜𝑓 𝐶𝑜𝑛𝑠𝑡𝑖𝑡𝑢𝑒𝑛𝑡𝑠𝑡 = ∑(𝑃𝑖,𝑡 × 𝑆𝑖,𝑡 × 𝐹𝑖,𝑡 × 𝐸𝑖,𝑡 )𝑖𝑃𝑖,𝑡 ∶ Stock Price of constituent 𝑖 at time of 𝑡 (on local currency)
𝑆𝑖,𝑡 ∶ Number of shares of constituent 𝑖 at time of 𝑡𝐹𝑖,𝑡 ∶ Free float ratio for constituent 𝑖 at time of 𝑡𝐸𝑖,𝑡 ∶ Spot currency rate for constituent 𝑖 at time of 𝑡 (*)
𝑁 ∶ Number of constituents in the index(*) Exchange rate of the trading currency vs calculation currency. For example, therate for a stock traded in HKD in the USD based index is an inverse number ofUSD/HKD (1 USD=HKD).
 Divisors are adjusted in accordance with S&P DJI ’s methodology ("Equity Indices
Policies & Practices Methodology" and "Index Mathematics Methodology").
Divisors will be adjusted for the various actions in the index ( e.g. constituentschange, changes in the number of shares and Free float ratio for the constituents,capital increase/decrease etc.) to keep the index level between pre and after theevent unchanged.

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6

(4) Price, Number of shares and Free float ratioPrices, number of shares, and the free float ratios are basically managed inaccordance with the S&P DJI methodology.
If a company is listed on two or more market s, the stock price on the primarymarket determined by Nikkei will be used.
Number of shares and the free float ratios are reviewed annually at the beginningof June in accordance with the periodic review described in (2).

(5) Total Return Index calculation
The total return version and net total return version of the ind ices are also
calculated on End-of-day basis. They are calculated both in the US dollar and theJapanese yen.
Treatment of the dividends is in accordance with S&P DJI’s methodology.

5: Index Value(1) Historical index value The index is calculated retroactively to December 3, 2012 on the end-of-day basis.
 The constituents for the retroactive calculation from June 1, 2015 to December 8,2017 are selected applying with the Periodic Review rule described in (2) as on
June 2015, June 2016, and June 2017. Before May 2015, the constituents selected
as on June 2015 are used for the retroactive calculation.
 Neither buffer rule (2-5) nor workaround for concentration to the financial sector(2-1) are applied to those selections.
 Parent/Subsidiary companies are determined based on the shareholder
information at the inception (2017).
(2) Index Restatement
Indices may be revised retroactively in accordance with S&P DJI's methodology.

6: Others

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7(1) Licensing“Nikkei Asia300 Investable Index” is a copyrighted material calculated in amethodology independently developed and created by Nikkei. Nikkei is the sole
exclusive owner of the copyright and other intellectual property rights in the Nikkei
Asia300 Investable Index itself, the methodology to calculate the Nikkei Asia300
Investable Index. Licensing agreement with Nikkei is necessary if companies intend
to create Index linked funds and passive funds, etc. It is also required to use this index
for disseminating, providing, and showing, etc. to the third party in the way as Nikkei
decides.
(2) Disclaimer
Nikkei has no obligation to publish the Nikkei Asia300 Investable Index
continuously, and Nikkei is not responsible for any error, delay or omission in theNikkei Asia300 Investable Index. Nikkei is entitled to change the details of the Nikkei
Asia300 Investable Index and to suspend or stop the calculation and the announcementof the index.
Although, in principle, the Nikkei Asia300 Investable Index is calculated andmaintained in accordance with the information provided here, Nikkei has discretio nto take measures Nikkei deems appropriate when the events which are not covered inthis document happen or under the circumstances where it is difficult to continue tocalculate the index using the current rules. In addition, the specifications describedmay be amended without notice. Nikkei does not assume any loss or damage causedby the use of this document.
The Nikkei Asia300 Investable Index is the property of Nikkei, which has
contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) tocalculate and maintain the Index. The Index is not sponsored by S&P Dow JonesIndices LLC or its affiliates or its third party licensors, including Standard & Poor's
Financial Services LLC and Dow Jones Trademark Holdings LLC (collectively, “S&P
Dow Jones Indices”). S&P Dow Jones Indices will not be liable for any errors oromissions in calculating the Index. “Calculated by S&P Dow Jones Indices” and therelated stylized mark(s) are service marks of S&P Dow Jones Indices and have been
licensed for use by Nikkei. S&P® is a registered trademark of Standard & Poor's
Financial Services LLC, and Dow Jones® is a registered trademark of Dow Jones
Trademark Holdings LLC.
(3) Contact
Index Business Office, Nikkei Inc.
Email： index@nex.nikkei.co.jp

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8

Appendix: Change history of Index Guidebook
November 10, 2017

Initial version

December 11, 2017

Calculation start date added

Abbreviations added to “2: Index Names”

“(2-6) Definitions and the base date of the indicators in theMeasure” added to “3:Constituents Management ”

November 21, 2022

Additions to the “(2) Disclaimer” in “6:Others”

Additions to the “3:Constituents Management (3) Extraordinary
removals” to clarify

January 2, 2024

Amendment to the description in “1:Concept”

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