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Rebalancing Program

Rebalancing Program

Scales of Justice

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Asset Rebalancing Program (ARP)

This service is available to clients with minimum family assets of $100,000.00

Effectively Managing Portfolio Risk:

Market volatility can drastically change your portfolio's investment mix. For instance, a stock market surge could significantly increase the equity portion of your portfolio, even if you make no additional investments in these funds. The result may be more risk exposure in your portfolio than you intended.

Why Rebalancing Makes Sense:

One effective way to manage this risk is to regularly "rebalance" your portfolio. Rebalancing provides two important advantages that can help you achieve your goals:

  • It helps ensure that your assets are properly allocated according to your chosen investment strategy and risk tolerance as market conditions change over time.
  • It may also help you earn more attractive long-term returns by shifting money from an asset class that has performed well to one that has lagged, providing relatively low prices in the underperforming asset class.

Asset Rebalancing Helps Maintain Your Investment Allocation:

Rebalancing is not a market timing strategy in which you are trying to outguess the financial markets, but rather a disciplined, systematic approach for maintaining a consistent risk profile over the long term.

Our Approach to Asset Rebalancing:

Once your investment portfolio is in place we assign a target weighting to each of your holdings. Calculations and trading recommendations to achieve rebalancing are performed when new money is invested into the plan or when money needs to be redeemed.

Rebalancing is not mandatory – we give our clients the choice to rebalance or not.

It is generally not recommended to rebalance if the variance is less than 5% of the portfolio value. Normal rebalancing does not exceed 10% of portfolio value.

Frequency and Cost:

We are compensated by a negotiated fee based on the amount of assets you have invested with us. The services of monitoring and rebalancing portfolios are included in this fee.

Rebalancing calculations will be performed when additional investments are being purchased, or at scheduled reviews.

This service is available to clients with minimum family assets of $100,000.00

The Rewards of Rebalancing

Initial Asset Allocation
Rebalancing info

Portfolio Not Rebalanced

Portfolio is Rebalanced

Source: Mackenzie Investments and Globe HySales. From August 31, 1986 to September 29, 2006. The illustration shows two hypothetical portfolios with initial investments of $40,000 distributed equally across four indexes. Canadian equities are represented by the S&P/TSX Total Return Index, Canadian bonds by the Scotia Capital Universe Bond Total Return Index, US equities by the S&P 500 Composite Total Return Index ($CDN), and Global equities by the MSCI World Index ($CDN). The first portfolio is not rebalanced. The second portfolio employs a rebalancing range of 3% and a semi-annual rebalancing frequency (December 31 and June 30). The rebalanced portfolio also assumes that each index is rebalanced to the 25% target if any one of the components exceeds 28% or drops below 22% of the portfolio allocation. All rebalancing (selling and buying) is done on a tax-deferred basis. Neither of the portfolio illustrations take into account any tax consequences that could be incurred by an investor over the 20-year period. Neither illustration takes into account any fees that an investor may pay.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Rebalancing transactions may trigger tax consequences for investors. Mackenzie makes no representation or guarantee regarding the asset allocation of an investor’s portfolio.


Mutual Funds Provided Through FundEX Investments Inc.