Luno Blue Chip+ Index Methodology

1. Disclaimers

This Methodology document is an addendum to, and therefore forms part of, Luno’s Bundles Terms of Use and Discretionary Mandate. If a matter is not specifically provided for in this Methodology document, it will be regulated by the Terms and Mandate. It is important that you read and sign Luno’s Terms and Discretionary Mandate in full before investing into any product which references Luno’s Blue Chip + Bundle and Index.

2. Luno Blue Chip+ Index

The Luno Blue Chip+ index is a proprietary rules-based, market capitalization-weighted index designed to track the performance of top-tier crypto assets - being the 2 largest, most liquid coins and the top 7 US tokenised stocks. It serves as a benchmark for an asset mix of cryptocurrency and US tech exposure.

This document outlines Luno’s Index methodology, including its selection of constituent assets, Reconstitution and Reweighting.

3. Index Methodology

Objectives and Approach

The Index aims to track performance across two major market domains:

1. Crypto Blue Chips: Providing exposure to crypto asset value (Bitcoin) and smart contract infrastructure (Ethereum).
2. Top US Tech Giants: Exposure to the top 7 tech giants defining and driving global innovation.

The Index combines the transformative power of US tokenised stocks with the growth potential of market-leading crypto projects.

Selection of Constituents

The Index will maintain a fixed number of constituent assets determined by the following inclusion criteria:

• Universe: The Blue Chip+ Bundle will only include constituent assets in the top crypto Blue Chips and the top US technology stocks by market capitalisation.
  • Crypto Asset Selection: Exposure is limited to the top two crypto assets by market capitalisation.
  • Excluded Crypto Assets: Stablecoins (e.g. USDC, USDT), digital assets pegged to the value of another asset (e.g. PAXG), and derivatives of another cryptocurrency will be excluded from the inclusion criteria.
  • Tokenised Stocks Selection: The top 7 US technology stocks by market capitalisation.
  • Market Sector: Tokenised Stocks must fall within the technology sector as ranked by market capitalisation.

4. Rebalancing and Weighting

Targeted Weighting Scheme

The Index utilises a fixed-allocation weighting method.

Reconstitution and Reweighting Schedule

The Blue Chip+ Index will be Reconstituted and Reweighted as follows:

• Frequency: Quarterly.
• Adjustments: Constituents and their weights are reset to their target fixed allocations at each Reconstitution + Reweighting date (“RRDate”).
• Additions and Deletions: Constituent assets are included based on highest market cap, thus assets may be added and removed if there are significant shifts in the market. An asset will be included if it is in the top 2 crypto assets or top 7 US tech stocks for two consecutive months prior to the RRDate and on the RRDate. Should a new asset meet the inclusion criteria, on the RRDate an asset will be removed and the new asset added to the bundle. For crypto assets, rankings will be snapshot at 9:00am SAST on the 1st business day of a month. For US Tech stocks, rankings will be snapshot at the close of trading for US stocks on the 1st business day of the month.

5. Index Calculation and Pricing

Index Value Calculation

The Index value is calculated from the weighted sum of constituent asset performances relative to their base-period and RRDate values. The index is normalised to a base value of 1000 at inception.

6. Governance

• Luno, in its discretion, may make changes to this methodology from time to time. Luno may also make decisions relating to constituents and weightings, processes and prices sources etc. should such decisions be required by circumstances not defined in this Index methodology.
   
• Discretionary decisions taken by Luno that involve constituents or weightings will be based on a comprehensive fundamental assessment of each constituent asset considered, including but not limited to listing criteria, market conditions, regulatory requirements, custody considerations, security incidents, or other relevant circumstances.
   
• Any discretionary decisions will be made in accordance with Luno’s internal governance procedures and approved by the Luno Investment Committee.