Construction Rules for theMorningstar® Japan ex-REIT
Gender Diversity Tilt Index

September 2024

Morningstar Japan ex-REIT Gender Diversity Tilt Index | September 2024

Overview

3 ...................................................................................................................................................................2

Overview ...........................................................................................................................................................................3
Index Construction ............................................................................................................................................................4
Starting Universe...............................................................................................................................................................4
Security Selection..............................................................................................................................................................4
Number of Stocks ..............................................................................................................................................................4
Index Weighting ................................................................................................................................................................5
Index Maintenance and Calculation ..................................................................................................................................6
Scheduled Maintenance ....................................................................................................................................................6
Corporate Actions ..............................................................................................................................................................6
Index Calculation and Price Data ......................................................................................................................................6
Methodology Review and Index Cessation Policy .............................................................................................................7
Data Correction and Precision ...........................................................................................................................................8
Intraday Index Data Corrections ........................................................................................................................................8
Index-Related Data and Divisor Corrections ......................................................................................................................8
Appendixes ........................................................................................................................................................................9
Appendix 1: Modifications to the Rulebook .......................................................................................................................9
Appendix 2: Equileap Gender Scorecard™ Calculation .....................................................................................................9
Appendix 3: Morningstar Sectors ....................................................................................................................................10
About Morningstar Indexes .............................................................................................................................................112©2024 Morningstar, Inc. All rights reserved. The Morningstar name and logo are registered marks of Morningstar, Inc. Marks
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Morningstar Japan ex-REIT Gender Diversity Tilt Index | September 2024

Overview
The Morningstar® Japan ex-REIT Gender Diversity Tilt Index pursues objectives that align with environmental, social, andgovernance standards in reference to gender diversity. Built with the data and scoring methodology of Equileap, the index isdesigned to provide exposure to companies that have strong gender diversity policies embedded in their corporate culture andthat ensure equal opportunities to employees, irrespective of their gender.
For more information on the Equileap Gender Scorecard™ and ranking, refer to Appendix 2.
Index Inception and Performance Start Date
The index inception date is Mar. 27, 2023, and the performance start date, when the first back-tested index value wascalculated, is Dec. 18, 2015.

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Morningstar Japan ex-REIT Gender Diversity Tilt Index | September 2024

Index Construction
Exhibit 1: Construction Process
Starting Universe

Eligibility

Portfolio Construction• Securities are derived from theMorningstar Japan ex-REIT
Domestic Index• Securities that are part of thealarm bell controversy list, asassigned by Equileap1, areineligible for the index.

• The index is tilt weighted
based on the assigned genderequality score.
• Sector weights are neutralizedwith respect to thebenchmark.

Morningstar Japan
ex-REIT Gender
Diversity Tilt Index• Security weights are capped
at 5%

1

Please refer to Appendix 1 for more details.

Starting Universe
At each reconstitution, securities for the Morningstar Japan ex-REIT Gender Diversity Tilt Index are derived from the Morningstar
Japan ex-REIT Domestic Index (benchmark). For more details on benchmark construction, refer to the Construction Rules for theMorningstar Japan ex-REIT Domestic Index.
Security Selection
All benchmark securities that are not part of the latest alarm bell controversy list of securities provided by Equileap are eligible
for the Morningstar Japan ex-REIT Gender Diversity Tilt Index. No other negative screening is applied apart from the alarmbell controversy list.
Number of Stocks
The number of stocks in the Morningstar Japan ex-REIT Gender Diversity Tilt Index is variable, subject to the selection andeligibility criteria at the time of reconstitution.

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used in conjunction with Morningstar products or services are the property of Morningstar or its subsidiaries.

Morningstar Japan ex-REIT Gender Diversity Tilt Index | September 2024

Index Weighting
The constituent weighting scheme for the index is calculated and applied as noted in the following steps:• All eligible constituents are sorted in descending order of their Equileap gender equality score, or GE score.1• For all securities with the same Equileap GE score, Category A data2 is used to break the tie, starting with criterion 5(promotion and career development) and continuing, where required, through criterion 4 (workforce), 3 (senior management),
2 (executive), and 1 (board). In case of securities having the same Category A score, the one with the higher GE score for theprevious year is assigned a higher rank. Lastly, float market capitalization is used as the final tie-breaker preferring higher overlower float market capitalization.
• The securities are divided into five groups based on the ranks assigned using Equileap GE scores in earlier steps having equal
number of securities in each of the five groups. Two or more securities with the same Equileap GE score, Category A scores,
previous year GE scores and float market capitalization are always assigned to the same group. Thus, each of the five groups
might not contain an equal number of securities, though this is the target.
• Tilt factors of (0.50, 0.75, 1.00, 1.25, 1.50, in this respective order) are assigned to the security groupings with the worst to thebest Equileap GE scores in the previous step.
• For securities that are part of the current eligible universe, which had been excluded due to the presence of the alarm bell
controversy at the previous reconstitution, are assigned an additional factor of 0.5 such that
Final Tilt Factor = 0.5 x Tilt Factor• The tilted weight for each security is calculated based on the formula:

𝑇𝑖𝑙𝑡𝑒𝑑 𝑊𝑒𝑖𝑔ℎ𝑡 =𝐹𝑖𝑛𝑎𝑙 𝑇𝑖𝑙𝑡 𝐹𝑎𝑐𝑡𝑜𝑟 ∗ 𝐹𝑙𝑜𝑎𝑡 𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝𝑖𝑛
∑1 (𝐹𝑖𝑛𝑎𝑙 𝑇𝑖𝑙𝑡 𝐹𝑎𝑐𝑡𝑜𝑟 ∗ 𝐹𝑙𝑜𝑎𝑡 𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝𝑖 )• To minimize deviation from corresponding weights in the parent index, the sector weights in the index are set equal to sector
weights in the benchmark index during each reconstitution. The weights of the securities within each sector are maintained in
the proportion of their tilted weights after normalization, as assigned in the prior step.
• As a final step, individual security weights are capped at 5% to avoid concentration risk and the excess weights are
redistributed over the other constituents of the portfolio in the proportion of their existing weights.

1 The Mar-2022 GE scores are used to fill any missing GE scores during the annual reconstitutions from Dec-2015 to Dec-2022. Equileap covered all securities included in the Morningstar Japan
Index in Mar-2022 as a one-time exercise and all securities in the Morningstar Japan Index will be covered during Equileap’s 2023 research cycle and onwards.
The Dec’17 scores range from 0-35 and was the first time Equileap provided Gender Equality (GE) scores. From Dec’18 onwards Equileap provides GE score ranging from 0 to 100. Also Equileap
provides simulated scores till Dec’16 with range of 0 to 100. So the Dec’17 GE scores have been normalized to 0-100 range to maintain consistency with data from other years.
For a security without an Equileap GE score (after above step), it is assigned a representative GE score, which is the average of scores assigned to all securities within the same sector in the
country of classification for the security. Securities that are part of the alarm bell controversy list and REIT list are considered for the calculation of the sector average scores. Please refer toAppendix 2 for Morningstar sector definitions. Morningstar GECS is periodically reviewed and updated, so for maintaining representativeness and continuity of the history for the index strategy,
these changes may be backfilled retrospectively where appropriate for indexes created after the effective date of such changes.
2 Refer to Appendix 1 for more details on Category A data.

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used in conjunction with Morningstar products or services are the property of Morningstar or its subsidiaries.

Morningstar Japan ex-REIT Gender Diversity Tilt Index | September 2024

Index Maintenance and Calculation
Scheduled Maintenance
The index is reconstituted, where the membership is reset, annually in December. Adjustments are made on the Monday
following the third Friday of December and reflected the following Monday. The market data and Equileap data used forreconstitution is as of the last trading day of November.
The index is rebalanced quarterly and implemented after the close of business on the third Friday of March, June, September,and December. Adjustments are implemented after Friday’s market close and reflected the following Monday. The market
data and Equileap data used for rebalancing is as of the last trading day of February, May, August, and November.
As the reconstitution of the Morningstar Japan ex-REIT Gender Diversity Tilt Index is less frequent than the Morningstar Japan
ex-REIT Domestic Index (parent index), the securities excluded from the parent index at its reconstitution effective date would
also be deleted from Morningstar Japan ex-REIT Gender Diversity Tilt Index.
During quarterly reviews, weights are rebalanced to enforce 5% security capping. New securities are not added to the index, andsector weights are not neutralized to be equal to sector weights in the parent index during the quarterly reviews. Securities thatare part of the alarm bell controversy list will be removed during the quarterly reviews and reintroduced at the nextreconstitution if they are no longer part of the alarm bell controversy list.
Index files are published according to the global calendar schedule. For more information, please refer to the Morningstar
Indexes Holiday Calendar.
Corporate Actions
The treatment of corporate actions will be as per the float market capitalization weighted indexes.
For more details, please refer to the “Treatment for float market capitalization indexes” section in the Morningstar Indexes
Corporate Actions Methodology rulebook
Index Calculation and Price Data
Details about index calculations and price data can be found in their respective rulebooks: Morningstar Indexes Calculation
Methodology and Equity Closing Prices Used for Index Calculation. 3

3 For non-JPY Index levels, London 4 PM WM/Refinitiv rates are used in the back-test period until the December 2022 reconstitution period. Post the December 2022 reconstitution period, Japan close
spot FX rate is used.

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Morningstar Japan ex-REIT Gender Diversity Tilt Index | September 2024

Methodology Review and Index Cessation Policy
The index methodology is continually reviewed to ensure it achieves all stated objectives. These reviews consider corporate
action treatment, selection, and maintenance procedures. Subscribers to the index will be notified before any methodology
changes are made. For more details, refer to the Morningstar Index Methodology Change Policy.
Morningstar also notifies all subscribers and stakeholders of the index that circumstances might arise that require a materialchange to the index or a possible cessation of the index. Circumstances that could lead to an index cessation include, but are
not limited to, market structure change, product definition change, inadequate supply of data, insufficient revenue associatedwith the index, insufficient number of clients using the index, and/or other external factors beyond the control of theMorningstar Index Committee.
Because the cessation of the index or benchmark index could disrupt subscriber products that reference this index, all
subscribers are encouraged to have robust fallback procedures if an index is terminated. For more details, refer to theMorningstar Index Cessation Process.

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used in conjunction with Morningstar products or services are the property of Morningstar or its subsidiaries.

Morningstar Japan ex-REIT Gender Diversity Tilt Index | September 2024

Data Correction and Precision
Intraday Index Data Corrections
Commercially reasonable efforts are made to ensure the accuracy of data used in real-time index calculations. If incorrect
price or corporate action data affects index daily highs or lows, it is corrected retroactively as soon as is feasible.
Index-Related Data and Divisor Corrections
Incorrect pricing and corporate action data for individual issues in the database will be corrected upon detection. In addition,
an incorrect divisor of an index, if discovered within two days of its occurrence, will always be fixed retroactively on the day it
is discovered to prevent an error from being carried forward. Commercially reasonable efforts are made to correct an older
error subject to its significance and feasibility.
For more details, refer to the Recalculation Guidelines.

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used in conjunction with Morningstar products or services are the property of Morningstar or its subsidiaries.

Morningstar Japan ex-REIT Gender Diversity Tilt Index | September 2024

Appendixes
Appendix 1: Modifications to the Rulebook
SectionDescription of Change

Update Date

Starting Universe

Updated the parent benchmark from Morningstar
Japan ex-REIT Index to Morningstar Japan ex-REIT
Domestic Index

September 2024

Appendix 2: Equileap Gender Scorecard™ Calculation• Headquartered in Amsterdam, Equileap is the leading provider of data and insights on gender equality in the corporate sector.
Equileap researches and ranks over 3,000 public companies around the world using a unique and comprehensive Gender
Equality Scorecard™ with 19 criteria, including the gender balance of the workforce, senior management, and board of
directors, as well as the pay gap, parental leave, and sexual harassment.
• Equileap was launched in 2016 by Diana van Maasdijk and Jo Andrews, two professionals who have significant experience inphilanthropy and specialize in women’s rights. Their mission was to take a leap toward gender equality in the workplace andlay out the data to show why that leap was so important.
• Companies are ranked according to 19 gender criteria in four categories:o Category A: Gender balance in leadership and the workforce.
o Category B: Equal compensation and work-life balance.
o Category C: Policies promoting gender equality.
o Category D: Commitment, transparency, and accountability.
• Equileap monitors incidents involving sexual harassment and gender discrimination. If an identified incident signals structuralor systemic problems according to Equileap's methodology, the company receives an alarm bell and becomes ineligible for theindex. The alarm bell securities will continue to be part of the controversy list for the next 12 months from the date it was
flagged by Equileap.
• Companies involved in controversies below within the past two years are assigned to the alarm bell controversy list:o One legal judgment or official ruling regarding gender discrimination or sexual harassment against the company or an
employee.
o Two or more settled legal cases, or one settled class action regarding gender discrimination or sexual harassment against acompany or an employee.
o Two or more legal judgments or official rulings regarding gender discriminatory practices in a company’s marketing andadvertising.
For more details, please visit: http://equileap.com/

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used in conjunction with Morningstar products or services are the property of Morningstar or its subsidiaries.

Morningstar Japan ex-REIT Gender Diversity Tilt Index | September 2024

Appendix 3: Morningstar Sectors
The following sectors are considered while calculating the index:• Sectors
o Basic materialso Communication services
o Consumer cyclicalo Consumer defensiveo Energyo Financial services
o Healthcareo Industrials
o Real estateo Technology
o Utilities

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used in conjunction with Morningstar products or services are the property of Morningstar or its subsidiaries.

Morningstar Japan ex-REIT Gender Diversity Tilt Index | September 2024

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