Portfolio Rebalancing Calculator

Work out the buys and sells needed to return a drifted portfolio to its target weights.

About Portfolio Rebalancing Calculator

Rebalancing is mechanically simple: compute each target value from the new total and trade the difference. Turnover is half the sum of absolute trades because sales fund the purchases. Rebalancing forces selling what has risen and buying what has fallen, which is the discipline most investors find hardest and which supplies much of its benefit.

Formula

Portfolio Rebalancing

Trade per asset = total portfolio × target weight − current value

turnover: Half the sum of absolute trades, since every sale funds a purchase

Worked example

With the default values below, Portfolio Rebalancing Calculator returns Equity Trade Required of -$24,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Current equity valueminimum 0: 234,000
Current bond valueminimum 0: 54,000
Current cash valueminimum 0: 12,000
Target equity weightaccepts 0–100 %: 70 %
Target bond weightaccepts 0–100 %: 25 %

Results

Equity Trade Required: -$24,000.00
Bond Trade Required: $21,000.00
Cash Trade Required: $3,000.00
Total Portfolio Value: $300,000.00
Total Trading Turnover: $24,000.00

Step by step

1Values used
2Portfolio Rebalancing
3Equity Trade Required= -24,000.00
4Bond Trade Required= 21,000.00
5Cash Trade Required= 3,000.00
6Total Portfolio Value= 300,000.00
7Total Trading Turnover= 24,000.00

Assumptions and limits

The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Portfolio Rebalancing calculated?

Trade per asset = total portfolio × target weight − current value Rebalancing is mechanically simple: compute each target value from the new total and trade the difference. Turnover is half the sum of absolute trades because sales fund the purchases.

Why does Portfolio Rebalancing matter?

Rebalancing forces selling what has risen and buying what has fallen, which is the discipline most investors find hardest and which supplies much of its benefit.

What values do I need to enter?

This calculator takes 5 inputs: Current equity value, Current bond value, Current cash value, Target equity weight, Target bond weight. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.