Choose rebalance method
Before rebalancing, consider which rebalance method best fits your goals. These methods reflect different levels of conservatism or flexibility in how you bring portfolios in line with their targets. Each method has implications for how the system calculates buy and sell orders, based on available cash, outstanding trades, and expected proceeds.
Choose a rebalance method based on how you want to align the portfolio with its target:
Conservative rebalance: Gradual realignment using only current cash and positions. Minimizes risk by avoiding overcommitment.
Full rebalance: One-step realignment using current and expected cash from sells. Faster but requires careful cashflow management.
Full rebalance including existing orders: Similar to full rebalance, but also includes cash and positions expected from existing trade orders.
Exchange: Swap specific overweight positions for underweight ones.
Invest cash: Use only available cash to buy underweight positions. No sells are suggested.
Cover for cash: Sell positions to cover a negative cash balance. No buys are suggested.
Model change: Replace old model holdings with new ones, using either Conservative or Full rebalancing.
Conservative rebalance
Use this method to realign the portfolio cautiously, avoiding over-commitment of positions or cash. Conservative rebalancing is typically done in two rounds:
First round: Rebalance using the current cash and positions
Sell excess current positions (settled or unsettled):
Positions expected from existing buy orders are excluded from the rebalance calculation.
Existing sell orders for the same security (all statuses except "Open") are subtracted from the suggested trade amounts. Example: You need to sell Security A for €100, but you already have a trade order to sell Security A for €40. Rebalancing will suggest a new sell order for €60.
Buy underweight positions with current cash:
Available cash is reduced by any existing buy orders (all statuses except "Open"), since this cash is already committed.
Existing buy orders for the same security (all statuses except "Open") are subtracted from the suggested trade amounts. Example: You need to buy Security A for €100, but you already have a trade order to buy Security A for €40. Rebalancing will suggest a new buy order for €60.
Second round: Use the cash received from buys
After the orders are executed, run the second round of rebalancing, using the cash you received from sells to make further buys to reach full alignment.
Tip
To apply this method, set the following in the Rebalance window:
Sell from field: Positions minus sell orders
Buy with field: Current cash only
Full rebalance
Use this method to realign the portfolio in one step, using both current cash and the cash expected from suggested sells (estimated with the latest available market prices).
This method offers faster alignment but requires careful trade order management to ensure that the cash from sells is received in time to fund the buys. You can reduce risk by limiting how much of the cash expected from sells is used for buys. For example, instead of counting sell values at 100%, you can count them at 95%. If the prices drop between rebalancing and executing sales, you'll likely still have enough cash to complete your buys. See Preference - Portfolios for details.
With full rebalance, the system will:
Sell excess positions, including the position amounts expected from the existing buy orders:
Positions expected from existing buy orders (all statuses except "Open") are included in the rebalance calculation.
Existing sell orders for the same security (all statuses except "Open") are subtracted from the suggested trade amounts. Example: You need to sell Security A for €100, but you already have a trade order to sell Security A for €40. Rebalancing will suggest a new sell order for €60.
Buy underweight positions using current cash and the expected cash from suggested sells (estimated using the latest available market prices):
Available cash is reduced by any existing buy orders (all statuses except "Open"), since this cash is already committed.
Existing buy orders for the same security (all statuses except "Open") are subtracted from the suggested trade amounts. Example: You need to buy Security A for €100, but you already have a trade order to buy Security A for €40. Rebalancing will suggest a new buy order for €60.
Tip
To apply this method, set the following in the Rebalance window:
Sell from field: Positions minus sell orders plus buy orders
Buy with field: Current cash and cash from sells
Consider also aligning the settlement dates of suggested orders to reduce the risks:
Align buy and sell dates field: Buy when sells are settled
Full rebalance including existing orders
Use this method to realign the portfolio in one step, using current cash, expected cash from existing trade orders with a positive cash effect (such as deposits or sell orders with statuses other than "Open"), and expected cash from suggested sells
This method offers faster alignment but requires careful trade order management to ensure that the cash from sells is received in time to fund the buys. You can reduce risk by limiting how much of the cash expected from sells is used for buys. For example, instead of counting sell values at 100%, you can count them at 95%. If the prices drop between rebalancing and executing sales, you'll likely still have enough cash to complete your buys. See Preference - Portfolios for details.
Before rebalancing, the system estimates available cash and positions based on current holdings and existing trade orders (all statuses except "Open") using the latest available market prices. It uses this information to determine what sells are needed and how much cash will be available to fund buys.
With full rebalance including existing orders, the system will:
Sell excess positions:
Positions expected from existing buy orders (all statuses except "Open") are included in the rebalance calculation.
Existing sell orders for the same security (all statuses except "Open") are subtracted from the suggested trade amounts. Example: You need to sell Security A for €100, but you already have a trade order to sell Security A for €40. Rebalancing will suggest a new sell order for €60.
Existing buy orders for the same security (all statuses except "Open") increase the suggested sell amounts. Example: You need to sell Security B for €100, but you already have a trade order to buy Security B for €30. Rebalancing will suggest a new sell order for €130.
Buy underweight positions using current cash,expected cash from suggested sells and from existing orders (estimated using the latest available market prices):
Available cash is reduced by any existing buy orders (all statuses except "Open"), since that cash is already committed.
Cash expected from existing and suggested sell orders (all statuses except "Open") is used (estimated using latest market prices)
Existing buy orders for the same security (all statuses except "Open") are subtracted from the suggested trade amounts. Example: You need to buy Security A for €100, but you already have a trade order to buy Security A for €40. Rebalancing will suggest a new buy order for €60.
Existing sell orders for the same security (all statuses except "Open") increase the suggested buy amounts. Example: You need to buy Security B for €100, but you already have a trade order to sell Security B for €30. Rebalancing will suggest a new buy order for €130.
Tip
To apply this method, set the following in the Rebalance window:
Sell from field: Positions minus sell orders plus buy orders
Buy with field: Current cash, cash from sells and from orders
Consider also aligning the settlement dates of suggested orders to reduce the risks:
Align buy and sell dates field: Buy when sells are settled
Exchange
Use this method when you want to exchange a specific overweight position for an underweight one. The system sells the selected position(s) and uses the expected cash to buy the selected security or securities that are below target. Cash from the sells is estimated based on the latest market prices.
With exchange, the system will:
Sell excess positions. The sells can take into account existing trade orders, depending on your choice in the Sell from filed.
Buy underweight positions using the expected cash from the sells (estimated using the latest available market prices).
This method offers faster alignment but requires careful trade order management to ensure that the cash from sells is received in time to fund the buys. You can reduce risk by limiting how much of the cash expected from sells is used for buys. For example, instead of counting sell values at 100%, you can count them at 95%. If the prices drop between rebalancing and executing sales, you'll likely still have enough cash to complete your buys. See Preference - Portfolios for details.
Tip
To apply this method, set the following in the Rebalance window:
Buy with field: Cash from sells only
Select the positions to exchange
Consider also aligning the settlement dates of suggested orders to reduce the risks:
Align buy and sell dates field: Buy when sells are settled
Invest cash
Use this method when you want to invest excess cash in the portfolio without making any changes to existing positions. The system will only generate buy orders using the current available cash. No sell orders are created.
Tip
To apply this method, set the following in the Rebalance window:
Restrict rebalancing to accounts: Enable this setting to ensure the system only considers account cash balance and doesn’t generate sells to fund buys
Buy with field: Current cash only
Cover for cash
Use this method when you want to sell portfolio holdings to cover a negative cash balance, without making any other changes to your portfolio. The system will only generate sell orders for the amount needed to bring the cash balance back to zero. No buy orders are created. This method is useful in cases like fee withdrawals or redemptions that result in a temporary negative cash balance in the account.
Tip
To apply this method, set the following in the Rebalance window:
Restrict rebalancing to accounts: Enable this setting to ensure the system only considers the negative cash balance and doesn’t suggest buy orders.
Sell from field: Positions minus sell orders plus buy orders. This ensures the system accounts for any pending sell orders that may affect position availability and prevents overselling.
Model change
With the model change, you can update your portfolio model by selling the securities from the old model and investing everything into the securities in the new model.
You have an option to execute a model change either as conservative rebalancing (buying with current cash) or full rebalancing (buying with current cash, cash from sells and, optionally, cash from orders), depending on whether you prefer to do it gradually or all at once. Regardless of the method chosen, rebalancing will sell off your old positions entirely and reinvest the proceeds into the new positions.