Free float market capitalization (expressed in USD) is used to determine the weights of each underlying asset. Asset weighting is set at the beginning of each quarter and will remain constant throughout the quarter.
Weighting cap is applied to prevent any one asset from dominating the index. The cap for each asset is set at 25% for the current quarter. If an underlying asset’s free float market capitalization weighting exceeds this number, the excess weights will be distributed proportionally to the other assets until none of the assets’ weights exceeds 25%.
Every quarter the Index Steering Committee will meet and review the following to ensure the quality and robustness of the index:
- Asset weighting for the upcoming quarter
- Performance and quality of constituent exchanges
- Index design parameters
- Key decisions from the index review will be made public on Brave New Coin’s website.
The index is rebalanced on a quarterly basis so that it reflects the underlying assets’ market performance. Rebalancing involves the update of asset weights based on their free float market capitalization (expressed in USD) at the time of rebalancing.