Rebalancing Sensitivity
Rebalancing Sensitivity for cadence, threshold, and turnover analysis
Compare how rebalancing schedules and drift thresholds change turnover, transaction costs, and after-tax results over the selected historical period.
Compare policies that allow more allocation drift with policies that trade more often.
What this tool analyzes
- How turnover changes across rebalancing cadences and thresholds.
- How far allocations drift from their targets over time.
- Taxes and transaction costs under each policy.
When to use rebalancing sensitivity
Compare target tracking and turnover costs across policies before testing one in Portfolio Backtest.
Assumptions to review
- Target allocation and drift tolerance.
- Whether the portfolio is taxable and lot selection matters.
- The range of cadences and thresholds in the comparison.
FAQ
- Does more frequent rebalancing always improve results?
- No. More frequent rebalancing reduces drift but increases turnover and tax drag. The best cadence depends on the allocation, market path, and whether the account is taxable.