The S&P BRIC 40 Risk Control Indices offers investors greater stability and a reduction in the overall risk level of the S&P BRIC 40. By integrating volatility controls within the index rules, Standard & Poor’s provides a new level of innovation for investors looking to gain exposure to the BRIC equity markets while limiting their risk.

The S&P BRIC 40 Risk Control Indices utilizes the existing S&P BRIC 40 methodology, plus an overlying mathematical algorithm designed to control the level of risk of the S&P BRIC 40 by establishing a specific volatility target and dynamically adjusting the exposure to the S&P BRIC 40 based on its observed historic volatility.

S&P BRIC 40 Risk Control Indices include:

• S&P BRIC 40 Daily Risk Control 5% Index
• S&P BRIC 40 Daily Risk Control 10% Index
• S&P BRIC 40 Daily Risk Control 15% Index
• S&P BRIC 40 Risk Control 18% Index

  Index Name	Index Version	Risk Control Level	Maximum Leverage	Interest Rate	Volatility Calculation	Decay Factor Short-Term Volatility	Decay Factor Long-Term Volatility	Rebalance Frequency
  S&P BRIC 40 Daily Risk Control 5% Index	The S&P BRIC 40 Daily Risk Control 5% Index represents a portfolio consisting of the S&P BRIC 40 Index and a cash component accruing interest based on three-month Eurodollar deposits. The index is dynamically adjusted to target an 5% level of volatility. Realized historical volatility is calculated using an expontentially weighted average. A shorter term and longer term measure of volatility are taken using decay factors of 94% and 97%, respectively. In order to be conservative, the higher level of volatility is used in the risk control calculation. The index rebalances daily.
  	Net Total Return	5%	150%	3-month Eurodollar deposits	Exponentially weighted	94%	97%	Daily
  S&P BRIC 40 Daily Risk Control 10% Index	The S&P BRIC 40 Daily Risk Control 10% Index represents a portfolio consisting of the S&P BRIC 40 Index and a cash component accruing interest based on three-month Eurodollar deposits. The index is dynamically adjusted to target an 10% level of volatility. Realized historical volatility is calculated using an expontentially weighted average. A shorter term and longer term measure of volatility are taken using decay factors of 94% and 97%, respectively. In order to be conservative, the higher level of volatility is used in the risk control calculation. The index rebalances daily
  	Net Total Return	10%	150%	3-month Eurodollar deposits	Exponentially weighted	94%	97%	Daily
  S&P BRIC 40 Daily Risk Control 15% Index	The S&P BRIC 40 Daily Risk Control 15% Index represents a portfolio consisting of the S&P BRIC 40 Index and a cash component accruing interest based on three-month Eurodollar deposits. The index is dynamically adjusted to target an 15% level of volatility. Realized historical volatility is calculated using an expontentially weighted average. A shorter term and longer term measure of volatility are taken using decay factors of 94% and 97%, respectively. In order to be conservative, the higher level of volatility is used in the risk control calculation. The index rebalances daily.
  	Net Total Return	15%	150%	3-month Eurodollar deposits	Exponentially weighted	94%	97%	Daily
  S&P BRIC 40 Risk Control 18% Index	The S&P BRIC 40 Risk Control 18% Index represents a portfolio consisting of the S&P BRIC 40 Index and a cash component accruing interest based on three-month Eurodollar deposits. The index is dynamically adjusted to target an 18% level of volatility. Realized historical volatility is calculated using an expontentially weighted average. A shorter term and longer term measure of volatility are taken using decay factors of 94% and 97%, respectively. In order to be conservative, the higher level of volatility is used in the risk control calculation. The index rebalances daily.
  	Net Total Return	18%	150%	3-month Eurodollar deposits	Exponentially weighted	94%	97%	Daily

  
  Index Governance and Policy
  This index is maintained by the S&P Index Committee, whose members include Standard & Poor’s economists and index analysts. It follows a set of published rules and policies that provide the transparent methodology used to maintain the index.

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