Index. No operating expenses were noted.
Principal Investment Strategies
The Fund will normally invest at least 80% of its total assets in equity securities of real estate investment trusts (“REITs”). The Fund will normally invest at least 90% of its total assets in securities that comprise the Underlying Index. The Underlying Index is calculated using a dividend yield weighted methodology that seeks to reflect the performance of approximately 24 small- and mid-cap equity REITs across the North America region. The Underlying Index is compiled, maintained and calculated by Keefe, Bruyette & Woods, Inc. (“KBW”). As of , 2010, the Underlying Index included [·] companies with a market capitalization range of between $[·] and $[·].
Concentration Policy. The Fund will invest 25% or more of the value of its total assets in securities of issuers in an industry or group of industries to the extent that the Underlying Index concentrates in an industry or group of industries.
KBW Premium Yield Equity REIT Index
Calculation Methodology. The KBW Premium Yield Equity REIT Index is calculated using a dividend yield weighted methodology. The securities comprising the Underlying Index are selected based on their ability to pay income. KBW uses the Adjusted Free Flow from Operations (AFFO) to derive the dividend payout ratios and arrive at the universe of the 24 best paying small- and mid-cap equity REITs.
The four or five largest companies in the Underlying Index will be assigned maximum initial weights equal to the lesser of their actual capitalization weight or 8% in the reconstituted Underlying Index. All other companies with a capitalization weight of more than 5% will be assigned initial weights of 4% in the reconstituted Underlying Index. All companies with capitalization weights under 4% will share equally in the weight available for redistribution, but none of these companies will be assigned an initial weight of more than 4%.
Rebalancing. The securities comprising the Underlying Index are evaluated annually by KBW.