Who can use this feature?
The Luno Large Cap Bundle is currently only available to customers in South Africa, Malaysia, Nigeria, and Indonesia.
Now that you know how to diversify your cryptocurrency portfolio by investing in a Luno Large Cap bundle, you’re probably wondering what rebalancing is and how it works.
Let’s take a closer look at rebalancing and its benefits
We’ve established that the coins in your bundle are determined by CoinDesk’s smart algorithm, which tracks the market performance of the world’s largest cryptocurrencies. So, what happens when one or more coins in your bundle don’t perform well? The coins in your bundle will be adjusted based on their performance. It doesn’t make sense for your crypto holdings to remain the same while the market continues to change.
That’s where the benefits of quarterly auto rebalancing come in.
As the coins in your bundle drop or increase in value, we’ll rebalance your bundle every quarter by adjusting how much or how little of each coin is included. This way, your bundle will reflect changes in market capitalisation as tracked by CoinDesk's DLCS index.
If one of the cryptocurrencies hasn’t been performing well in the past quarter, we’ll lower its percentage so that there’s less of it in your bundle. That way, more of your investment can go towards coins that have better performance in the market. The algorithm helps to keep portfolio diversified by preventing your bundle’s value from being tied to a single (potentially underperforming) coin.
Quarterly rebalancing ensures that your bundle contains the largest and best-performing coins, without you needing to do any of the heavy lifting.
Here’s a hypothetical example
Let’s say you’ve just invested in a bundle that contains BTC, ETH, XRP, and SOL.
Over the next three months, let’s say that XRP’s market cap drops and SOL becomes more valuable, while the rest of the cryptocurrencies in your bundle stay relatively stable.
When you made your initial bundle purchase, maybe 10% of your investment went to XRP, and 5% went to SOL. Now that the market has changed for those two cryptocurrencies, it doesn’t make sense to keep them weighted that way. When the rebalancing event takes place, the portion of XRP in your bundle will decrease so that more funds can be dedicated to SOL.
Your rebalanced bundle might be 7% XRP and 8% SOL, so you now have more of the higher-performing coin and less of the lower-performing one.
When does my bundle get rebalanced?
We’ll always notify you via email and in the Luno app when your bundle's next auto-rebalancing will occur. Auto rebalancing happens every quarter on the second business day of January, April, July, and October.
Note
When rebalancing occurs, you’ll not be able to sell your bundle for a brief 1.5-hour window during each quarterly rebalancing event. These will take place in January, April, July, and October.
This means that bundle trading will be paused on the second business day of the following months at these times:
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January: 7:45 PM - 9:15 PM (UTC)
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April, July, October: 6:45 PM - 8:15 PM (UTC)
Sit back, relax and watch your investment evolve without lifting a finger!
Frequently asked questions
Customers in Malaysia have the option to unbundle – transfering individual cryptocurrencies out of their bundles.
Besides that, the included cryptocurrencies and their weightings are determined by CoinDesk’s DLCS Index and can’t be adjusted.
As opposed to daily, weekly or monthly rebalancing, quarterly rebalancing takes a longer-term view of crypto market changes, so your bundle isn’t jumping around in response to short-term volatility.
Rebalancing involves buying or selling crypto to adjust each coin’s weighting in the bundle, and these trades incur fees. Rebalancing more frequently would therefore increase the costs you pay in fees.
Yes, an annual rebalancing fee of 2% is charged against the value of the bundle.
Tip
Learn more about the fees charged for bundles.
You can top-up your bundle with more money, or sell a part or all of your bundle outside of the brief rebalancing event every quarter. You can also track the percentages, performance, and value of each coin.