If a portfolio exceeds a drift threshold of 3% from its intended allocation, we will automatically rebalance it. We define portfolio drift as the total absolute deviation of each asset class from its target, divided by two.
Note that for advised clients on our Betterment For Advisors platform, the drift threshold is 5% for portfolios that contain mutual funds.
Please note that you can request that clients’ portfolios only be rebalanced in response to cash flows (i.e., deposits, withdrawals, and dividend reinvestments) by contacting email@example.com.
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