Bringing the portfolio back in line
Markets pull a portfolio out of shape. When equities run ahead of bonds, the equity slice grows beyond your target weight – quietly raising your risk above what you planned. That gap between current and target weight is called drift.
Rebalancing trims what has grown and tops up what has lagged – a disciplined, mechanical way to sell high and buy low. It keeps your risk where you decided it should be, rather than wherever the last bull market left it.
But selling on a regular depå account realises a capital gain, taxed at 30%. The fix is cash-flow rebalancing: point each new contribution at your underweight holdings, so the portfolio drifts back toward target without a single sale – and without triggering tax.
Most savers do fine rebalancing once a year, or when a holding drifts more than 5 percentage points from target. More often just adds trades and tax; less often lets risk creep.
If you are still adding money regularly, you may rarely need to sell at all – new savings alone can keep the portfolio close to target. Switch to the New money mode below to see how.
Holdings & Targets
Current vs Target
Understanding Rebalancing
What is rebalancing?
Rebalancing means restoring your portfolio's mix back to its target weights. When some assets grow faster than others, the proportions drift away from plan – equities, for example, can become a bigger share than you intended and raise your risk.
Rebalancing sells what has grown and buys what has lagged, or directs new savings to underweight holdings, so the allocation comes back in line with your plan.
How often should I rebalance?
Most private savers do fine rebalancing once a year, or when an asset drifts more than 5 percentage points from its target weight.
Too often adds trades and possible tax without meaningfully improving the result; too rarely lets risk creep. A simple rule is to review the portfolio at the same point each year and only act when the drift is meaningful.
Threshold vs calendar rebalancing – what's the difference?
Calendar rebalancing happens at fixed times – say once a year regardless of how large the drift is. Threshold rebalancing happens only when an asset deviates by more than a set band from target, e.g. 5 percentage points, regardless of the date.
The threshold method reacts faster to big moves but requires you to monitor the portfolio more often; the calendar method is easier to follow with discipline.
Does rebalancing trigger tax on ISK vs depå?
On an ISK or kapitalförsäkring you are taxed on a flat-rate (schablon) basis on the whole capital, whether you buy or sell – so rebalancing inside the account triggers no extra tax.
On a regular depåkonto, every sale counts as a capital gain or loss, taxed at 30% on the profit. That is why it is often wise to rebalance a depå with new money rather than by selling. See the ISK vs pension comparison for more on account types.
What is rebalancing with new money?
Rebalancing with new money – sometimes called cash-flow rebalancing – means directing each new contribution to the assets that sit below their target weight, instead of selling what sits above.
The portfolio then moves toward target weights without selling anything, which avoids capital gains tax on a depå account and keeps transaction costs down. It works best when you save regularly. The compound interest calculator shows how those contributions grow over time.
How do I choose target weights?
Target weights should reflect your risk tolerance and time horizon. A long horizon and high risk tolerance justify a higher equity share, while a shorter horizon or lower tolerance argues for more bonds and cash.
A common starting point is a broad global equity fund as the core, complemented by bonds that dampen the swings. The key is that your targets sum to 100% and that you can stick with the mix even when markets move. Compare fund costs with the fund fee calculator.
What does drift mean?
Drift is the gap between an asset's current weight and its target weight. If equities have a 60% target but make up 68% after a rally, the drift is +8 percentage points – you now hold more equity risk than planned.
Drift arises naturally because different assets return different amounts over time, and rebalancing is the tool that corrects it.