We have several criteria and scenarios in which we would do an Active Rebalance, all to help bring your portfolio’s weights closer to its target time horizon and diversification mix.
- Selling assets that are above their targets and using the proceeds to buy assets that are below their targets. The size of the deviation we allow for a particular asset depends on the target weight for that asset - we allow more leeway for assets with larger target weights.
- Buying assets whose current weights are below their targets using cash in the account, which can come from previous sales or deposits.
For example, the client may have a 30% exposure to Burgundy. After a period of time, it may increase to 50%, making it riskier than intended. We would reduce the exposure to Burgundy and increase exposure to other regions.