Financial Calculators
Portfolio Rebalancing Calculator
Markets move your allocation for you. This moves it back.
Equity is off target by
15 points
75% now, 60% target, on ₹1,00,00,000
- Equity
- Sell ₹15,00,000
- Debt
- Buy ₹10,00,000
- Gold (target 10%)
- Buy ₹5,00,000
Rebalancing sells what has run up and buys what has lagged, which is the only systematic way to buy low and sell high. Do it on a calendar (yearly) or on a trigger (5 points of drift), not on a mood. Sales attract capital gains tax; directing new SIPs to the underweight asset avoids that.
These figures are for illustrative purposes only and are not investment advice. Please consult your investment adviser for investment related advice.
Sell what ran, buy what lagged
A portfolio set at 60% equity drifts to 70% after a good year and 50% after a bad one, without a single decision by you. Rebalancing restores the target by selling the asset that has grown and buying the one that has lagged, which is the only systematic way to sell high and buy low. It also keeps risk where you set it rather than where the market left it.
The calculator shows current weights, drift and the rupee amount to move in each asset. Directing new investments to the underweight asset achieves the same result without a taxable sale.
Target rupees minus current rupees
Total = equity + debt + gold\nTarget rupees for each asset = total x target weight\nMove = target rupees - current rupees (positive buy, negative sell)Worked example: Rs 75,00,000 in equity, Rs 20,00,000 in debt and Rs 5,00,000 in gold is a 75/20/5 split on Rs 1,00,00,000. Against a 60/30/10 target, equity is 15 points over: sell Rs 15,00,000 of equity, buy Rs 10,00,000 of debt and Rs 5,00,000 of gold.
Frequently asked questions
How often should I rebalance?
Yearly is enough for most investors, or whenever an asset drifts more than five points from target. More often adds cost and tax for little benefit.
Is selling equity to rebalance taxable?
Yes, on the gain, at capital gains rates. Reduce the tax by routing new SIPs to the underweight asset instead, and by using the annual LTCG exemption when you do sell.
Does rebalancing improve returns?
It mainly controls risk. Over long periods it tends to add a modest amount by forcing purchases after falls, and it prevents the portfolio from being overwhelmingly equity right before a crash.
What target should I use?
One tied to when you need the money, which the Asset Allocation and Bucket calculators suggest. The target matters more than the precision of hitting it.
Keep the mix you chose.
We rebalance client portfolios on a schedule, tax-efficiently, so the risk stays where it was set.