For mutual fund investors, taxes are inevitable. Even if you’re a long-term buy...
Welcome to MutualFunds.com
Please help us personalize your experience and select the one that best describes you.
Your personalized experience is almost ready.
Check your email and confirm your subscription to complete your personalized experience.
Thank you for your submission
We hope you enjoy your experience
Fixed income news, reports, video and more.
Municipal bonds news, reports, video and more.
Practice management news, reports, video and more.
Portfolio management news, reports, video and more.
Retirement news, reports, video and more.
Learn from industry thought leaders and expert market participants.
Deepen your understanding of Responsible Investing and learn how it can potentially help you build a more successful practice.
18 Most Popular Mutual Fund Categories
View All Categories
15 Most Popular Fund Companies
View All Fund Companies
15 Most Popular Fund Company Quick Screens
View All Fund Company Quick Screens
Receive email updates about fund flows, news, upcoming CE accredited webcasts from industry thought leaders and more.
Content focused on helping financial advisors build successful client relationships and grow their business.
Content geared towards helping financial advisors build better client portfolios.
Get insights on the industry trends and investment news from leading fund managers and experts.
There’s a great deal of literature that talks about the desired frequency of portfolio allocation. After all, rebalancing too infrequently puts your portfolio further away from its original risk-reward profile. But rebalancing too frequently increases transaction, fees, and tax payments.
In general, there are three common approaches to portfolio rebalancing. Any one of these rebalancing strategies is better than not rebalancing at all.
Want to know what is portfolio rebalancing? Click here.
Vanguard has researched threshold rebalancing results for the period 1980 through 2014. As the following chart illustrates, average annual returns and volatility are consistent for threshold strategies that range from 1% to 10%.
Vanguard analyzed the time-and-threshold between 1926 and 2014. As the following chart shows, rebalancing strategies that required more frequent monitoring at a lower threshold were more costly to implement. For example, a monthly monitoring strategy at a threshold of 1% had 423 rebalancing events. If you monitored quarterly and rebalanced at 5%, the number of rebalancing events plunged to 50. Average annual returns were relatively consistent across various timeframes, so investors with a smaller number of rebalancing events performed better.
Learn about other portfolio management concepts here..
Sign up for our free newsletter to get the latest insights on mutual funds.