Rebalancing
Definition
What is Rebalancing?
Restoring a portfolioThe complete collection of investments owned by an investor or managed under one mandate. toward its target weights by buying or selling assets.
Example in practice
How This Looks in Practice
After equities rise to 70% of a 60% target, the investorA person or organisation that commits capital with the expectation of a financial return. sells some shares and buys bonds.
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Related Terms
Portfolio
The complete collection of investments owned by an investor or managed under one mandate.
Portfolio ConstructionPortfolio Construction
The process of selecting and combining investments to meet return, risk, liquidity, and time-horizon objectives.
Portfolio ConstructionStrategic Asset Allocation
A long-term target mix of asset classes based on an investor's objectives and constraints.
Portfolio AnalyticsCorrelation
A statistic ranging from minus one to plus one that describes how two return series move together.