How Portfolio rebalancing works
It can be done with new contributions, redemptions or both. Taxes, exit loads, transaction costs and the acceptable allocation band affect how and when to act.
An example
A 60:40 portfolio that becomes 70:30 after an equity rally can move back by directing new money to debt or selling some equity, subject to costs.
Why it matters for your family
Rebalancing imposes discipline and keeps risk linked to the plan. It is not a forecast that the asset being reduced will fall next.
Questions people ask
- What does Portfolio rebalancing mean?
- Rebalancing restores a portfolio toward its intended asset allocation after market movement or life changes.
- Why does Portfolio rebalancing matter for a family?
- Rebalancing imposes discipline and keeps risk linked to the plan. It is not a forecast that the asset being reduced will fall next.
- Where can I verify information about Portfolio rebalancing?
- Start with SEBI Investor, linked on this page, and the current official document for the product or tax year involved.