When the market changes, stocks, exchange-traded funds (ETFs)1 and other assets are bought and sold in order to reach a target investment allocation. This is called portfolio rebalancing. The goal of rebalancing your portfolio is to reduce volatility and help manage risk.
Portfolio rebalancing comes with potential benefits, such as:
Portfolio rebalancing is included as part of Automated Investor's online investing service. That means you don't pay any additional transaction or management fees as your portfolio is automatically rebalanced.
Automated Investor avoids capital gains where possible if the assets aren't in a tax-advantaged account, such as an IRA. This limits the capital gains tax that may be due if the asset sold has appreciated in value.
Automated Investor efficiently and automatically rebalances your portfolio so you don't have to. This saves you time and the hassle of having to constantly monitor your account and research when and what adjustments are needed.
Automated Investor uses an algorithm that identifies the benefits of automatic rebalancing. It is then determined if transactions are needed to maintain your target investment mix.
We allow some drift so we can capture returns and calculate whether the benefit of automatic rebalancing makes sense based on your goals.
Any new contributions and dividends are invested in asset classes that are furthest away from the target investment mix to bring the portfolio back in balance.
Automated Investor rebalances your portfolio based on market movements.
If you're ready to take advantage of a portfolio that's automatically rebalanced for you, log into usbank.com or call 866-758-8655 to open an Automated Investor account.
Automated Investor is currently available exclusively for customers of U.S. Bancorp Investments and our affiliate U.S. Bank.