Calendar Rebalancing

Core idea

Calendar rebalancing reviews and adjusts a portfolio on a fixed schedule, such as monthly, quarterly, or annually. The rule is simple to govern but may trade when drift is small or wait while risk grows.

Implementation

The review interval should match the portfolio’s volatility, liquidity, governance, and cost constraints.

Primary risk

A fixed schedule can ignore large interim drift or create unnecessary trades after quiet periods.

Frequently asked questions

What is calendar rebalancing?

Calendar rebalancing reviews and adjusts a portfolio on a fixed schedule, such as monthly, quarterly, or annually. The rule is simple to govern but may trade when drift is small or wait while risk grows.

What is the main risk of calendar rebalancing?

A fixed schedule can ignore large interim drift or create unnecessary trades after quiet periods.