Portfolio Rebalancing Strategies and Implementation

This technical report discusses the critical role of rebalancing in portfolio management, emphasizing its importance in achieving long-term investment outcomes. It outlines three key decisions investors must consider: when to rebalance, how to rebalance, and how to integrate illiquid assets into the rebalancing framework. The report details various approaches to rebalancing, including predefined frequencies, symmetric and asymmetric thresholds, and dynamic thresholds, highlighting their implications on portfolio performance. Furthermore, it presents methods for executing rebalancing, such as physical, synthetic, and hybrid approaches, each with its advantages and considerations. The report also addresses the trade-offs between rebalancing frequency and associated costs, providing insights into optimizing rebalancing strategies to enhance investment efficiency. By leveraging extensive rebalancing capabilities, CIBC Global Asset Management aims to assist clients in aligning their portfolios with specific investment goals amidst fluctuating market conditions.