ESG Best-in-Class Methodology. The ESG Best-in-Class indices target the highest ESG-rated companies making up 50% of the adjusted market capitalization in each sector of the underlying index, subject to the limitation that only companies with an ESG rating of "B" or above are eligible for inclusion. The indices are reconstituted annually at the May Quarterly Index Review and rebalanced at the August, November and February Quarterly Index Reviews. 

The MSCI World ESG Index (with large and mid cap securities) and the MSCI USA IMI ESG Index (with large, mid and small cap securities) each include companies with high ESG rankings relative to their sector peers and target sector distributions that reflect those of their parent indices.

The MSCI USA ESG Select Index (with large and mid cap securities) is an optimized index designed to maximize exposure to companies with high ESG ratings, while maintaining sector diversification and risk and return characteristics similar to those of its underlying index (MSCI USA). At each quarterly review the index is optimized to have an expected tracking error of 1.8% relative to MSCI USA, using constraints that limit turnover and the sector weighting variance from MSCI USA. Tobacco companies are not eligible for the index.

¹The MSCI USA Broad ESG Index will converge with the MSCI USA IMI ESG Index; they will be identical as of the effective date of the Quarterly Index Review in May 2011.