Defiance Hotel Airline and Cruise ETF (CRUZ US) – Portfolio Construction Methodology

The underlying BlueStar Global Hotels, Airlines, and Cruises Index offers global travel-and-leisure exposure by selecting “Travel Companies” that derive at least 50% of revenue or assets from passenger airlines, hotels and resorts, or cruise operations. The universe is drawn from worldwide developed and emerging markets and includes common shares and ADRs/GDRs. Constituents must satisfy certain investability screens: for new additions, full market cap typically ≥USD 150m, free float or foreign-investor availability ≥10%, and three-month ADTV ≥USD 1m with a minimum share-trading count; existing members are subject to reduced maintenance thresholds to limit unnecessary turnover. All qualifying Travel Companies are included and weighted by free-float market cap, with a modified cap so that no single constituent exceeds 8% and any excess is redistributed proportionally. The index is reconstituted and rebalanced quarterly, when eligibility, liquidity and caps are reapplied.

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