Summary of the Europe 30 Index Methodology
The Europe 30 ProFund (the “Fund”) seeks investment results, before fees and expenses, that correspond to the performance of the ProFunds Europe 30 Index (the “Index”).
The ProFunds Europe 30 Index is composed of 30 companies domiciled in eligible Western European countries, whose securities are traded on U.S. exchanges or on the NASDAQ. The component stocks of The ProFunds Europe 30 Index are determined based on liquidity, and relative weights are determined based on a modified market capitalization approach.
Eligible countries include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.
Procedures to determine the component stocks and relative weights are as follows:
Compile the universe of the Depositary Receipts, New York Shares or Ordinary Shares traded on a U.S. exchange for the companies located in the eligible countries1. When selecting the Depositary Receipts, only consider “Sponsored Level II or Level III” Depositary Receipts, as these issues are required to register with the SEC and adhere to applicable requirements for U.S. GAAP.
Filter the companies selected from STEP 1 above according to their liquidity as measured by average dollar-traded volume over the previous six months. The thirty most-liquid names will comprise the index.
Determine the modified weight of each company in the Index as follows:
- Calculate the original weight of each company based on the parent company’s market capitalization.
- Allocate 50% of the total market capitalization equally among 30 names. By doing this, each company should have 1.667% of the weight, totaling 50%.
- Allocate remaining 50% of the total market capitalization by multiplying the original weight by 50% remainder. The result should equal to half of the original weight.
- Combine 1.667% and half of the original weight for each company to come up with the “modified market capitalization.”
The ProFunds Europe 30 Index will be reconstituted at least once per year. In addition, the weighting of the index will be reviewed continuously to prevent any single security from representing more than 24.5% of the index, to prevent the collective weight of those index securities whose individual weights are greater than 5% from exceeding 49%, and to prevent the collective weights of securities in the same industry subgroup from exceeding 24.5%. If any of the above thresholds are threatened, a rebalance may be achieved by proportionally scaling down the weights of all securities contributing to the violation toward 3.3%. The aggregate weight reduction will be proportionally redistributed among the remaining stocks. In addition to the annual reconstitution, ProFunds Advisors reserves the right to replace any component stock at any time if warranted.
1As sourced by Bloomberg, L.P.
Index Holdings as of 12/27/18
|TOTAL SA-SP ADR||4.54%|
|SAP SE-SPONS ADR||4.45%|
|ASML HOLDING NV||3.29%|
|BRIT AMER TO-ADR||3.25%|
|AMARIN CORP -ADR||1.91%|