FROM 2008-2012: PHILOSOPHY BEHIND THE WILDER NASDAQ OMX® GLOBAL ENERGY EFFICIENT TRANSPORT INDEX (HAUL)
The Wilder NASDAQ OMX® Global Energy Efficient Transport Index (HAUL) is designed to define and track innovative, energy efficient transportation; specifically, businesses that stand to benefit substantially from a societal transition towards cleaner and improved means of moving goods and people. Stocks and sector weightings within the HAUL Index® are based on their significance for greater efficiency, for reducing costs and time in transit, and for technological advancement. The Index emphasizes solutions that make ecological and economic sense and can include stocks from around the world.
We do not take defensive positions within the Index when markets decline, appear over-valued, or the Index is experiencing unusual volatility. Rather than try to select Index components based upon financial or market-based data only, we robustly look at innovation and efficiency in transportation technologies broadly conceived and thus may select stocks and sectors on technical and environmental criteria. We judge our performance by how well the Index tracks the movements of stocks in transportation efficiency and innovation – both down and upwards - and anticipate significant ongoing volatility in this sector.
We apply qualitative analysis at each quarterly rebalancing to determine sector weights and securities based on significance for improving transportation; an ability to reduce fuel and other costs in moving goods and people; technological innovation; marketplace significance; intellectual property; and other non-quantitative criteria. The HAUL Index® is expected to be a diversification tool; given an inherent and significant volatility to this sector, the Energy Efficient Transport Index® (HAUL) is expected to be volatile as well.
Stock weightings are determined each rebalancing by evenly dividing by total sector weights using modified equal weighting; within any sector, stocks are initially equal weighted. Banded stocks under $200 million in market capitalization are removed from sector weight calculations and set at 0.5%. Following the Quarterly rebalancing, stocks move the next three months according to respective prices and automatically reset for next Quarter's start.
Generally speaking two important themes are found in this Index. One is cutting-edge technology: these are the energy efficient transport ideas of tomorrow such as new electric vehicles, plug-in hybrids, advanced fuels, or futuristic propulsion. The other theme here is the existing means of transport that, importantly, while mature and maybe a century old, are more energy efficient solutions in the first place. These often-large industries still can deliver some notable innovation today, hauling goods or people in more efficient ways than alternatives; examples here may include better bicycles, buses, ships, or trains.
(1) The Energy Efficient Transport Index® (HAUL Index®) uses a modified equal dollar weighting. No single stock may exceed an initial 5% of the total Index weighting at the start of quarterly rebalancings.
(2) To be included in the selection universe a company must be identified as having significant exposure or relevance to improving energy efficiency in transport including via innovative technologies, contributing to lowering costs of moving goods or people, or having potential for widespread adoption.
Companies in the Energy Efficient Transport Index® (HAUL):
advance transport energy efficiency such as by land, air, sea, by rail, or by subway and intermodal means; this may include traditional yet energy efficient methods such as railroads that importantly can provide inherently efficient means to haul goods and people in the first place.
Its scope is global: companies considered for this Index (HAUL) can generally be listed on various liquid stock markets from around the world.
Large conglomerate companies with interests too outside of transport may be included, if also significant to this energy efficient transport sector.
(3) Market capitalization for a majority of Index (HAUL) stocks is typically $200 million and above. To account for the notable but smaller companies sometimes significant to the field, a minority of banded stocks may have market capitalizations between $50 million and $200 million.
(4) Stocks in the HAUL Index® generally as a guideline should:
have three-month average market capitalization of at least $50 million;
have a three-month average closing price above $1.00;
be listed on a major and liquid exchange among countries around the world;
reach minimum average daily liquidity requirements for sufficient trade volume.
(5) Wilder Transport Index, LLC retains the right to determine final sector weights and index components regardless of index components meeting of index inclusion criteria. The Index components for each quarterly rebalance will be finalized 14 calendar days prior to the enactment of each quarterly rebalance.
Overall there is some bias in favor of purer-play companies in transport-related fields. Companies doing significant work in a relevant field but also operating outside transport, for instance conglomerates also making lighter materials that can help achieve greater efficiencies in transport, or can reduce transit noise or pollution etc may be included if also advancing transport efficiency.
HAUL INDEX® CALCULATION METHODOLOGY
The Index (HAUL) is calculated using a modified equal dollar weighting methodology. Component securities and weights are determined by their respective sector and size. Each Sector is assigned an aggregate weight within the index. Components less than $200 million in total market capitalization are set to one-half of a percent (0.5%). The remaining components in each Sector are equally weighted using Sector weightings minus the sum of the weights of less than $200 million in market capitalization. Sector weightings were initially determined by the Index Provider and are reviewed each quarter in conjunction with scheduled quarterly review of the Index. Within each sector components weighting cannot exceed initial five percent (5%) at rebalance.
THE ENERGY EFFICIENT Transport Index® (HAUL) IS GENERALLY COMPRISED OF COMPANIES IN THE FOLLOWING AREAS:
Alternative Vehicles: This wide-ranging category of alternative vehicles and related technologies can include electric cars and plug in hybrids, better energy efficiency among larger trucks and buses, as well as work advancing smaller more personal bikes, bicycle components, and scooters. It may include alternative fuels and their related distribution systems such as liquid, gaseous, or solid fuels; advanced batteries that can store energy in innovative ways; basic precursor materials for battery chemistries; nanotechnology such as materials for EVs, vehicle power storage, and related processes and systems.
Rail & Subway Systems: Includes modern high-speed rail technologies as well as the traditional railroads all of which can haul goods, freight, or people more efficiently than by other means; this encompasses relatively energy efficient technologies for mass transit and for hauling goods from most advanced bullet trains to classic steel wheels on rails; subways, related infrastructure, and logistics and other support specific for growing railroad and subway systems.
Sea, Land, Air, & Intermodal: Includes manufacturers and facilitators for modern transport methodologies by land, sea, air as well as intermodal systems that can tie them together for more efficient movement of goods and people; may contain for instance hauling, shipping, carriage of people and goods by sea; more energy efficient transport by land; aerospace; airports and logistics; as well as firms advancing synergies for efficient intermodal transport.
Transport Innovation: Encompasses wide-ranging innovation furthering energy efficient transport including innovative technology, advances such as in natural gas fuel or cellulosic biofuels, new 21st century means to haul perishable goods, reduce costs of fuel or time in transit. May include advanced propulsion systems, strengthening or lightening materials to achieve greater range, innovation in distribution of liquid and gaseous fuels, modern control systems, and latest advances in material, technology and transport management.