How does rebalancing work?

We continuously monitor your accounts using automated technology to ensure that your portfolio weights are consistent with your plan. Portfolios are automatically rebalanced in response to price changes (the markets), deposits or withdrawals, changes in your risk score, or changes in the ETFs we use. Automatic rebalancing is a free service for Wealthsimple clients.

We automatically reinvest dividend income in the ETFs that are most underweight relative to your plan. We also support fractional shares and rebalancing is performed without any minimum trade size requirement.

If your portfolio's weights differ from plan weights by more than 20%, your portfolio will be rebalanced by the next business day. For example, a threshold of 20% means that if your plan weight is 10% for a particular asset class (ie. U.S. stocks), a rebalance will be triggered if the actual weight is above 12% or below 8%.

Was this article helpful?
2 out of 2 found this helpful