How does Endowus rebalance the portfolios and how long does it take? (HK)

What is the auto-rebalance feature?

Our auto-rebalancing feature helps clients stay aligned with the target asset allocation (e.g. 60% equity | 40% fixed income) of their portfolios. Research has shown that maintaining a portfolio’s target asset allocation contributes to returns in the long-term. Thus the auto-rebalancing feature is one of our value-added services for clients.

When the allocation of a fund is out of alignment with its target asset allocation by 15% due to market movements, the auto-rebalancing feature will be triggered. For example, if a fund within a portfolio has a target allocation of 10% and over time this fund’s allocation moves by +/- 1.5%, the auto rebalancing feature will trigger. Once auto-rebalancing is triggered, an email will be sent to inform you that Endowus will be executing a rebalance for your portfolio after 24 hours unless you opt out.

Please note that if the deviation from the target allocation is less than HK$100 in value (US$100 for USD goals), auto-rebalancing will not be triggered.

How do you rebalance a portfolio?

For the rebalancing process, we will first redeem units in the funds overweight to its target allocation.. After the redemption is complete, the proceeds will be invested into the funds that are underweight to its target allocation. This will bring the overall portfolio as close as possible to its target asset allocation. The process takes up to 7 business days to complete.

Step-by-step video guide:

How to Turn On Auto-Rebalancing

Can I turn off the auto-rebalancing feature?

You have the option to opt out of auto-rebalancing by switching off this feature: Log in to your Endowus account via a web browser > Account> Preferences > Auto-rebalancing Off.

Please note:

If there is an ongoing Endowus fee charge on your Endowus account, any rebalancing will be delayed till after the fee charge is complete. This prevents any overselling of your units due to fluctuations in the portfolio's NAV.

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