# Page History

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The construction of the index is done in two stages:

• Rules-based inclusion in the index universe
• Determination of constituent weights

### Weighting Schemes

The index is market-value weighted.

In value-weighted indices, each constituent influences the index in proportion to its value. The weights are calculated at each rebalancing date using the following formula:

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w_{i,t} = \frac{V_{i, t}}{\sum\limits_{i}^{n} V_{i, t}}

where:

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body w_{i,t}
denotes the weight of constituent
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body i
at time
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body t

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body V_{i, t}
denotes index constituent
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body i
's estimate of fair value at time
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body t
.

The fair value is estimated using a consistent asset pricing methodology. Index-constituent value weights are calculated in the reference currency so that all constituent market values denominated in a different currency than the reference currency are converted accordingly.

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Alternative weighting schemes are available including equal weights and capped weights, by which individual weights cannot exceed a 5% cap. A capped value-weight index follows the same calculation methodology as the value-weights scheme described above, however, prevents any single constituent from having a disproportionate influence on the index. A limit is imposed whereby an individual constituent's weight are capped at 5%. Thereafter, the weights of the remaining index constituents are increased as a consequence of reducing the weights of the larger companies. The weights of the uncapped constituents are then checked, and if they exceed 5%, they are then also capped at 5%. This is an iterative process that is repeated until no company exceeds 5%.

Panel
borderColor red dashed Customised weights

Custom weighting schemes can also be designed in order to over- or under-weight different TICCS® segments.

### Constituent Selection

Constituents (or Index Universe) are selected with the aim of creating a representative sample of the Identified Universe, as described in the Universe Standard

### Constituent Entry and Exit

Constituents enter the index when they enter the index universe i.e. on their date of issuance.

Constituents exit the index when they reach maturity or default.

### Timing of Changes

The index is reviewed on a quarterly basis by the EDHECinfra Index Committee for new entries and exits.