Asset Allocation Rebalancing Calculator

Optional. Money you are about to put in anyway, which the plan directs at the holdings that are furthest short before anything is sold. Leave it blank if there is none. This is the field most rebalancers do not have, and it is often the whole answer: a contribution a little under twice the sale a rebalance would need will remove the sale entirely, with no spread and, outside a tax wrapper, no disposal.

Optional. What a trade costs you as a share of its value, covering commission and half the bid-offer spread. Leave it blank and the plan is costed at nothing, which is honest about what the model knows rather than a claim that trading is free. A quarter of a percentage point is a plausible figure for a retail fund trade and is not a quote.

How far a holding may wander from its target before you are willing to trade. Five percentage points is a common convention and is what the workbook opens on: on a sixty percent target that means acting at sixty-five or at fifty-five. It is the single most consequential figure here. Set it to zero and you will be told to trade on a tenth of a point, which is noise with a spread attached; widen it and the same portfolio needs no trade at all. A drift exactly on the band is inside it.

One row per holding, up to eight: what it is worth today and what share of the portfolio you want it to be. Enter the shares as percentages or as plain weights; they are divided by their own total, so a set that does not add to a hundred is rescaled rather than refused. The name column is yours to read and no formula ever looks at it. Leave unused rows blank and keep them at the bottom, because a filled row below a blank one is refused rather than quietly skipped.

The body of the grid: how much selling you would still have to do, recomputed for every combination of contribution and band. One hundred and twenty-one cells, each one the whole plan run again. It is a component of the table rather than a result on its own.

The same total with any contribution added. The target value of each holding is its share of THIS, not of the portfolio as it stands, which is why adding money changes every target value and not just the ones being bought.

Machinery, and NOT an input. Excel substitutes each value from the row axis into this cell while it fills the grid; the rest of the time it mirrors New_Money. Change New_Money above, never this: the axis is derived from the holdings and the model reads this cell, so editing the mirror desynchronises the two and the grid comes out meaningless.

Machinery. Excel requires the formula being tabulated to sit in the grid's top-left corner, where it means nothing to a reader, so it is formatted away. It holds Selling_Still_Required.

The values down the left of the grid: how much new money you bring. It runs from nothing up to about two and a half times the sale a rebalance would take with none, in five equal steps either side of your own figure, floored at nothing because you cannot contribute less than that. Read a row to hold the contribution fixed and vary the band. The middle entry is your own figure.

The largest distance any holding has travelled from its target, in either direction, as a share of the portfolio. This is the figure your band is compared with, and it is deliberately the worst rather than the average: an average drift hides the one holding that has run away.

The same distance expressed in money, which is what makes the band decision concrete. Ten points of drift on a small portfolio is not worth a trading cost; the same ten points on a large one is.

What every trade in the plan costs at the rate you entered, buying and selling alike. Note that a contribution does not always reduce this: it removes selling but adds buying, so on a portfolio whose underweight holdings carry more than half the target weight the total turnover can rise even as the sale shrinks. The figure below is the one that isolates the rebalancing part.

What the holdings add up to today. Every weight and every drift is measured against this figure, so a holding left out of the grid shifts all of them.

How much buying the plan calls for in total. When a rebalance is called for this is the whole purchase side of it; when it is not, it is just the contribution going to work, because money you are adding still has to be invested somewhere.

Whether the worst drift is past your band, with both figures stated so the verdict can be checked at a glance. A drift exactly on the band reads No: the test is strictly greater, which matches the convention the band comes from.

One row per holding you entered: where it sits now, where it should sit, how far apart those are, what it should be worth after the trade, the trade itself and how much of that trade your contribution pays for. A trade is positive to buy and negative to sell. Unused rows are blank rather than zero, so an empty row is visibly empty rather than looking like a holding worth nothing.

Reads OK, or explains why the inputs are not valid or why the answer deserves a second look.

What the sale and the purchase it funds cost between them, which is the cost the rebalancing itself is responsible for. Buying with new money would have happened anyway, so charging it to the rebalance overstates what rebalancing costs you. This figure falls whenever the contribution does more of the work, and that is the comparison to make.

How many rows of the grid the model is actually reading. Shown because a row the tool has skipped is invisible otherwise, and a portfolio short of one holding gives a confidently wrong answer.

The values across the top of the grid: how much drift you will tolerate. It steps by a fifth of the drift you actually have, so the column where your band starts absorbing that drift is always somewhere on the axis. Read a column to hold the band fixed. The middle entry is your own figure.

Machinery, and NOT an input. The same for the column axis: Excel substitutes into it while filling the grid, and the rest of the time it mirrors Drift_Band.

What you would have to sell if you brought no new money at all. It is here purely to be read against the figure below it: the gap between the two is what the contribution is worth to you, and that gap is the point of the whole tool.

The two figures above, differenced: how much selling the contribution has spared you. In a taxable account this is the number to weigh, because a sale avoided is a gain not realised, and no rebalancer we could find reports it.

How much you actually have to sell, after the contribution has been directed at the shortfalls and after your band has had its say. Zero means the job is done without a disposal. This is the headline figure and it is the one the grid at the foot of the sheet sweeps.