Xtrackers MSCI All World ex US High Dividend Yield Equity ETF (HDAW US) – Portfolio Construction Methodology

The underlying MSCI ACWI ex USA High Dividend Yield Index targets high and sustainable dividend payers within the large- and mid-cap segments of developed and emerging markets outside the United States. It starts from the MSCI ACWI ex USA Index, which applies free-float and liquidity screens to ensure investability, then excludes REITs and securities failing dividend sustainability and earnings-quality tests based on dividend growth, earnings variability, leverage and payout ratios. Remaining stocks are ranked by trailing dividend yield within each country, and the highest-yielding names are selected to reach a target share of each country’s free-float market cap, using buffer rules to reduce turnover. Constituents are weighted by free-float adjusted market cap, subject to single-issuer caps (no stock can dominate the index). The index is reviewed and rebalanced on MSCI’s standard semi-annual index review schedule.

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