The following three reasons trigger a rebalancing:
- Deviation greater than 2%: The monthly rebalancing checks whether the current weighting of the investment funds according to the defined strategy deviates by at least 2% from the target weighting. If the deviation is 2% or more for a single investment instrument (including cash) or over an asset class (e.g. equities), trading orders are automatically generated (purchases or sales). After their execution, the target values of the strategy are restored (more information can be found here: Academy).
- Deposit / transfer: Incoming deposits or transfers trigger the rebalancing by default. The advantage is that even small payments or monthly standing orders with a large amount of existing pension assets always trigger a rebalancing and are thus invested directly. If necessary, this can also be deactivated under “Settings / Manage rebalancing settings”. In this case, monthly rebalancing will only take place if there is a deviation of more than 2% from the target strategy to the actual allocation.
- Strategy change: Changes in strategy always trigger a rebalancing. Many clients want to gradually build up (or reduce) the risk and implement this by means of an individual strategy. Small steps, such as 1% per fund, have not triggered a rebalancing before August 2020 – only if the deviation was greater than 2%. Now even the smallest adjustments to the strategy trigger a rebalancing, which creates even more flexibility.