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When do you rebalance my portfolios?

Rebalancing periodically due to market changes

We rebalance your portfolio periodically whenever we see that any one of the funds in your portfolio has drifted by a certain percentage from its target allocation that is mentioned in your Investment Program. Hence the trigger to rebalance is determined by threshold-based percentage drift. We believe that this method is preferable, instead of having a predetermined period-based approach (such as rebalancing once every quarter, or once every year).

We also consider various other aspects before we rebalance, including:

  • the cash available for rebalancing;
  • the size of any oncoming distributions and dividends;
  • the volatility of the securities in your portfolio; and
  • the impact on capital gains taxation because of rebalancing.

Even though QuietGrowth absorbs the trading costs incurred while rebalancing and does not charge the client for these costs incurred, we are mindful of these costs too. Hence we rebalance when the dollar amount of the buy or sell trades to be executed while rebalancing is of a meaningful amount only.

Rebalancing during specific events

We also monitor your portfolio for rebalancing during specific events. We consider whether we should rebalance your portfolio whenever:

  1. you deposit funds;
  2. you instruct us to withdraw funds;
  3. your cash account receives distributions or dividends;
  4. the risk tolerance of the portfolio is changed;
  5. we change the target allocation of the portfolio; or
  6. you merge another portfolio into the portfolio.

We evaluate whether we can perform threshold-based rebalancing at that time as we determine the exact buy or sell trades of various funds that we might execute.

Refer to our Investment Methodology page for more information.

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