Portfolio Rebalancing & Allocation Calculator

How portfolio rebalancing works

A current weight is a holding’s value divided by the portfolio total. A target weight is the share you type. The gap is the target value minus the current value. In the buy-and-sell mode, a positive gap is a purchase and a negative gap is a sale. The working total includes the new contribution, so the targets are applied to the portfolio after that money arrives, not only to the original total.

Selling and buying to rebalance

With no costs and fractional units, each holding is moved to its target value and the sales fund the purchases. Cash listed as a holding is one of those rows. The separate cash field is extra money that is not already in a row. Using both counts both. A reserve entered against that cash field is left unspent.

Contribution-only rebalancing

Contribution-only mode does not sell. It measures underweight gaps on the portfolio value after the contribution, then funds those gaps in proportion to their size, up to the cash that can be spent. If the cash is too small, the remaining gaps stay. The rule is proportional. It is not a claim that no other set of purchases could leave a smaller deviation.

Whole shares and fractional shares

When a unit price is present, quantity is the trade value divided by that price. Whole-unit mode rounds toward zero to the increment you set before the fees, the cash and the new weight are calculated. A missing or zero price does not produce a quantity. The monetary gap is still shown, and the feasible trade for that row is zero. Prices on this page are figures you type, not live quotes.

Trading fees and costs

A percentage fee, a fixed fee, a per-unit commission and a spread allowance are added as separate costs. The spread is not also included in the percentage fee. Purchases are reduced when paying those costs would require borrowing. The portfolio value after the trades is the starting value plus the external contribution, minus those costs. Transfers between holdings do not change the total on their own.

Rebalancing tolerance

A tolerance is a number of percentage points you choose. While it is on, a holding already inside that band is left unchanged. That can avoid a small trade, and it can also leave the mix away from the targets. No single band is presented here as appropriate for every investor.

Rebalancing and taxes

A sale can be a taxable event. Whether it is, and at what rate, depends on the account, the holding period and the jurisdiction. This page does not estimate a tax. It does not store a tax rate.

Common mistakes

• Ignoring transaction costs, then treating the frictionless gap as the trade that will be filled.
• Counting the same cash both as a holding and in the cash field.
• Reading the current value as if it were already the target value.
• Forgetting that a contribution changes the total the targets are applied to.
• Typing a unit price that is no longer the price you could deal at. This page does not refresh prices.
• Assuming the targets can be hit exactly once units, fees or a no-sale rule apply.
• Overlooking a whole-share rule that leaves cash uninvested.
• Treating a completed rebalance as evidence that future returns will be better.
• Ignoring that a sale may have tax consequences this page does not calculate.

Worked example

The desk opens with shares at 7,000, bonds at 2,000 and a cash holding at 1,000. Targets are 60, 30 and 10 percent. The separate cash field, the contribution and the costs are zero, and fractional units are allowed. The portfolio value is 10,000. Under those assumptions the plan sells 1,000 of shares and buys 1,000 of bonds. The cash holding stays at 1,000. Unallocated cash is 0. The value after the trades is 10,000, the weights are 60, 30 and 10 percent, and the allocation deviation is 0 percent of the portfolio. These figures are the same calculation the desk uses.

Assumptions and limitations

The desk compares the values and target weights you type. Buy-and-sell mode can sell an overweight holding and buy an underweight one. Contribution-only mode spends available cash and does not sell. A manual mode applies trade amounts you enter. Cash already listed as a holding is not added a second time through the cash field. The amounts are a calculation. They are not orders.

How the calculation works

The starting value is the sum of the holdings plus investable cash that is not already a row. The pre-trade value adds the contribution. Each target value is that pre-trade total times the target percent. In buy-and-sell mode the theoretical trade is target value minus current value. Contribution-only mode keeps only the underweight gaps and funds them in proportion to those gaps, up to cash that remains after the reserve, the minimum balance and the modelled costs. Whole units round toward zero using the unit price before fees and weights are calculated. A percentage fee, a fixed fee, a per-unit commission and a spread allowance are separate costs. Ending unallocated cash is opening cash plus the contribution plus sale proceeds, minus purchases and costs. Allocation deviation is half the sum of absolute differences between decimal weights. The final portfolio value is the starting value plus the contribution, minus the modelled costs.

Assumptions

• Target weights add up to 100 percent before a plan is treated as usable.
• A cash holding and the cash field are different. Entering both counts both.
• Whole-unit mode needs a unit price above zero. A missing price leaves that row untraded and still shows the monetary gap.
• The reserve cannot exceed the cash plus the contribution, and it is not spent.
• The plan does not borrow. A manual trade set that needs more cash is marked infeasible.
• Short sales and liabilities are not modelled.

A worked example

Shares worth 7,000, bonds worth 2,000 and a cash holding of 1,000, with targets of 60, 30 and 10 percent. The separate cash field, the contribution and every cost are zero, and fractional units are allowed. The plan sells 1,000 of shares and buys 1,000 of bonds. The cash holding stays at 1,000. Unallocated cash is 0. The portfolio remains 10,000 and the weights are 60, 30 and 10 percent, so the allocation deviation after the trades is 0. That zero is arithmetic. It is not a statement that the mix is suitable.

Limitations

Exact targets are not always reachable once units, fees, a reserve or a no-sale rule apply. Contribution-only funding is proportional to the underweight gaps. It is not a proof that the deviation is the smallest possible. Prices can move before a trade is filled. Tax on a sale is not estimated. The amounts are illustrative calculations, not instructions, and the page does not connect to a brokerage account.

Change one input at a time if a result looks surprising. The arithmetic is only as careful as the numbers you type, and it does not know your broker’s contract size.

Portfolio Rebalancing & Allocation Calculator recalculates as you type. Reset restores the starting figures on that page. Those figures are an illustration of the arithmetic, not a market observation and not a record of anyone’s account. Copy and export repeat the same rounded results. Cash amounts on screen are shown to two decimal places. A conversion, a margin schedule, or a programme rule that you leave blank is not invented. A zero divisor, a stop on the wrong side of an entry, or a target-weight total other than 100 percent produces a written explanation instead of a blank or infinite number.