Fund Index Policies

Fund Index Policies

How we put indices together

The purpose of the Lipper fund indices is to provide measurements of the central tendency of similar investment objectives. The indices may be used to describe the returns an investor could reasonably have expected to achieve in the past. Dominance of an index by a single fund is prevented by equally weighting component funds each quarter.

Year-end total net asset values (TNA) are used to determine the components of the indices. This rule applies to past years as well as to current and future years. This selection process is repeated every year-end.

A 10- or 30-component index can be created when there are at least 15 or 35 funds, respectively, in a single Lipper investment objective/classification.

Guidelines for determining components of Lipper indices

An index is composed of 10 or 30 largest funds in the Lipper investment objective grouping.

For open-end indices, funds must be listed on NASDAQ.

No more than one "class" or "feeder" per portfolio will be represented in an index. The index constituent will be the class or feeder with the highest TNA value.

A fund must pursue the index's objective the entire time that it is a constituent of that index.

Index histories begin as far back as possible, taking into account the fact that at least 15 and 35 valid funds are required to comprise a 10- or 30-component index, respectively.

Every investment objective index will have exactly 10 or exactly 30 component funds at the beginning of each quarter.

If the number of funds in any given objective falls below eight, the index may be discontinued.

If an objective is created as a breakout of an existing objective, the existing objective index will be reconstituted historically to reflect the purification of the objective.

All index components are evaluated daily to account for any mergers, liquidations or investment objective changes.

Component funds that fail to meet one or more Lipper index component rules will be dropped from the calculation process immediately. Failed components will be replaced quarterly.

Component replacement funds are selected using year-end TNA.

Open-end, single-country funds shall not be components of "general international" indices.

If 60% or more of components are priced, an index value will be computed. If more than 40% of an index's components are not priced or fail, the index value will be indicated as "N/A".