Rules

Universe: All ASX listed companies within the healthcare sector (per Global Industry Coding System, “GICS”)

Inclusion Criteria:

iQDEX Biotechnology: To be included in the Index companies must be listed on the Australian Stock Exchange and operate within the Biotechnology sector. Review of each company’s operations and pipeline is undertaken, rather than relying on appointed GICS sub codes to determine if the company operates within the biotechnology sector. This ensures all index constituents are truly biotechnology companies and not a miscoded company from a closely related field such as the medical device industry.

In line with the European Federation for Biotechnology’s definition of biotechnology1, this index considers a company to operate within the medical biotechnology sector, if a significant part of their products or service offering requires the use of cellular and biomolecular processes in advancing human health.

 

iQdex Life Sciences:  To be included in the index companies must be listed on the Australian Stock Exchange and operate within the one of the following sectors per their GICS code:

•       Biotechnology;

•       Pharmaceuticals;

•       Life Sciences Tools & Services;

•       Health Care Technology;

•       Health Care Equipment; or

•       Health Care Supplies. 

There are no restrictions on liquidity or market cap for the indices. This allows the index to capture the full spectrum of companies in the sector, providing an accurate benchmark for Australia, which has a high proportion of early stage companies that do not meet typical liquidity and market capitalisation restrictions.

Methodology: The Index uses a modified capitalisation weighting methodology, which is not adjusted for float.  The index weight of any single stock is capped at 8% and the excess weight is redistributed proportionately over the remainder of the index constituents.

The index is rebalanced and additions/deletions are made after market close on the third Friday after the close of each quarter. The index is calculated by Thomson Reuters, utilising their corporate actions methodology, which is available here. The indices are calculated on a daily basis by a dedicated Thomson Reuters support team. 

1. Bull, A. T., Holt, G., and Lilly, M. D., Biotechnology: International Trends and Perspectives (Paris: Organisation for Economic Co-Operation and Development, 1982).