Portfolio Rebalancing Calculator UK: Exact Buys and Sells

You picked a split, say 60% shares and 40% bonds, and then the market moved it for you. Rebalancing puts it back. This calculator tells you the exact pounds to buy or sell in each fund to get back on target, and it also does the version most people should try first: steering new money into whatever is underweight, so you rebalance without selling anything. Inside an ISA or pension selling costs you nothing in tax, but outside one it can create a capital gains bill, and on platforms that charge per trade every sale costs a dealing fee.

Two ways to rebalance, and which to try first

New money only sends every pound you add to the holdings furthest below target, filling the biggest gaps first, and sells nothing. If you invest monthly, this is usually enough to keep a portfolio close to its split for years, because each contribution leans against the drift. The calculator spreads the money so every holding it buys ends up the same proportion short of its target, and if your contribution is big enough it lands everything exactly on target. It also tells you how much new money that would take.

Full rebalance trims what has grown too big and tops up what has fallen behind, so the whole pot lands exactly on target in one go. It is the clean answer when the drift is too big for contributions to fix, or when you have stopped adding money, for example in drawdown.

How often, and how far is too far

There are two common rules. Calendar rebalancing checks once or twice a year on a fixed date. Threshold rebalancing only acts when a holding drifts a set number of points from its target, and 5 points is a widely used band. Many people combine the two: look once a year, act only if something is outside the band. Checking more often than that mostly adds trading costs and the temptation to tinker.

The band box in the calculator applies that rule for you. It measures drift in percentage points, so a 60% target that has grown to 66% is 6 points out.

What rebalancing is for

Rebalancing is risk control, not a way to earn more. Over long periods shares have tended to grow faster than bonds or cash, so a portfolio left alone slowly becomes more equity-heavy, and more volatile, than the one you chose. Putting it back means selling some of what has risen and buying what has lagged, which keeps the risk where you set it. If you hold a single all-in-one fund, such as a multi-asset fund with a fixed split, the fund manager does this inside the fund and you do not need this tool.

Assumptions and limits

• Trades are worked out to the nearest pound. Funds and ETFs trade in units, so your real orders will be slightly off, and fractional shares are not available everywhere.
• Dealing fees, fund spreads and stamp duty on UK shares are not deducted. On small trades with a fixed per-trade fee, it can be cheaper to skip a trade worth only a few pounds.
• Your holdings are treated as one portfolio. If they sit across an ISA, a pension and a general account, do the selling inside the tax wrappers and the buying wherever it costs least.
• No tax is calculated. If selling outside a wrapper could realise a gain, run the figures through the capital gains tax calculator first.
• This is information, not advice. The calculator executes your targets; it does not judge whether they suit you.

Related

• Asset allocation: stocks vs bonds: how to choose the targets you enter above.
• How many index funds do you need: fewer holdings, simpler rebalancing.
• Vanguard LifeStrategy review: an all-in-one fund that rebalances itself.
• Platform fee calculator: what trading costs on your platform.