An
automatic rebalancing strategy constantly adjusts the asset allocation of the fund based on the overall market valuation.
On a day-to-day basis, the portfolios will be managed by the bank's tech partner SigFig, which creates algorithms to do
automatic rebalancing and tax-loss harvesting.
To keep fees lower, robos rely mostly on passive investment instruments such as ETFs and index funds, typically charging a few more basis points for services like
automatic rebalancing and tax loss harvesting.
4 million accounts, Principal Financial Group found that just 2% of participants making their own investment choices made use of an
automatic rebalancing tool.
Automatic rebalancing:
Automatic rebalancing of the portfolio is essential to maintain the asset allocation at predefined levels.
The variable annuity's immediate attraction--at least for me, in the 1970s--was
automatic rebalancing.
But with their
automatic rebalancing in March 2009-the bottom of the market--they rebalanced back into equities and made substantial gains on the way back up.
Additionally, automatic contribution escalation is now offered by 47 percent of plans (up from 17 percent in 2006) and
automatic rebalancing is offered by 49 percent of plans (up from 27 percent in 2006).
Automatic Rebalancing and Highest daily NAV Guarantee are the key customer friendly differentiators of Smart Performer
The former focus on
automatic rebalancing to more conservative allocations as the specified retirement date draws near, while the later seek to align with the investor's risk tolerance (conservative, aggressive, etc.
In October 2014, the firm launched Betterment Institutional, in partnership with Fidelity, as a self-branded platform for financial advisors, providing advisors with a dashboard to view and manage client assets as well as custom reports,
automatic rebalancing and tax harvesting.
