Investor Q&A: What is Rebalancing?


Q. I saw a note in the goalwise portal about rebalancing, what is that?

A. There are two types of rebalancing on Goalwise - SIP rebalancing and Portfolio rebalancing.

Every year, we review and update our Mutual Fund selection based on the additional performance data for all the funds gathered over the past year. You can view the complete list of our 2019 fund recommendations here.

SIP rebalancing helps you with updating the funds in your ongoing monthly SIP, so that fresh investment starts going into the new funds right away. You can do this here: https://secure.goalwise.com/site/rebalance-sips

Portfolio rebalancing moves the already invested money out of the old funds and into the new funds. We ensure here that only equity investment that has crossed 1 year is rebalanced, to avoid exit load and short term capital gains tax. We also make sure the current asset allocation (split between equity and debt) matches the recommended allocation as per the goal settings. You can do this here:
https://secure.goalwise.com/dashboard/rebalance-portfolio

You can read our detailed blog on the rebalancing process here: https://www.goalwise.com/blog/portfolio-rebalancing-what-is-it-why-is-it-important-and-how-to-do-it/

But if on rebalancing, you move the fund from Fund A to B.. and if there are some exit charges for A, then that will be paid by us?

We will only move that part of Fund A which is exit load free. Typically for equity funds this means that they will be rebalanced only after 1 year of investment has passed.