ETF Rebalancing Calculator
Enter your current holdings and target allocations to see exactly what trades to make — or how to direct new contributions for a tax-efficient rebalance.
Markets move every day, and even a well-designed portfolio drifts from its target allocation over time. Left unchecked, a 60/40 stock-bond split can become 75/25 after a bull run, exposing you to more risk than you planned for. This free rebalancing calculator shows you exactly which holdings are overweight or underweight, recommends specific buy-and-sell amounts to get back on target, and offers a smart contribution-based approach that avoids triggering capital gains taxes.
Start with the pre-filled three-fund portfolio below or replace it with your own ETFs. Enter current dollar values and your desired target percentages, then click Rebalance to get your personalised action plan.
Portfolio Details
Calculated from holdings: $50,000
Holdings
| Ticker | Current Value | Target % | Current % | Drift | Status | |
|---|---|---|---|---|---|---|
$ | % | 50.0% | +0.00% | On Target | ||
$ | % | 25.0% | +0.00% | On Target | ||
$ | % | 25.0% | +0.00% | On Target |
Explore More Tools
Frequently Asked Questions
What is portfolio rebalancing and why does it matter?
Portfolio rebalancing is the process of realigning your holdings back to your target allocation after market movements cause them to drift. For example, if stocks outperform bonds, your portfolio may shift from 60/40 to 70/30 over time, taking on more risk than intended. Rebalancing keeps your risk level consistent with your investment plan.
How often should I rebalance my ETF portfolio?
Most research suggests rebalancing when allocations drift more than 5 percentage points from target, or on a set schedule such as quarterly or annually. Over-rebalancing can increase transaction costs and tax drag. A practical approach is to check quarterly and only trade when drift exceeds your chosen threshold.
What is contribution-based rebalancing and how does it save on taxes?
Contribution-based rebalancing means directing new money — such as monthly savings or dividend reinvestments — toward underweight holdings instead of selling overweight ones. Because you avoid selling, you do not realize capital gains and therefore owe no taxes on the rebalance. This strategy works well when drift is small (under 5%) and you have regular contributions.
Should I rebalance differently in a taxable account versus a retirement account?
Yes. In tax-advantaged accounts like IRAs and 401(k)s, buying and selling to rebalance has no tax consequences, so you can trade freely. In taxable brokerage accounts, selling triggers capital gains taxes. Prioritize contribution-based rebalancing in taxable accounts and save active sell-and-buy rebalancing for your retirement accounts where possible.