Enter reinvestment and rebalancing options on this tab.
Rebalance Frequency - Click the drop-down menu to select the frequency at which the portfolio is rebalanced. Choose from Monthly, Quarterly, Semi-Annually, Annually, Biennially (2 yrs.) or None. If you want the portfolio to rebalance to different asset allocations over time, click the Subsequent Allocations button. Note: The Subsequent Allocation feature is not available if you select a Rebalance Frequency of None.
Rebalance Threshold % - In this field, you can enter a rebalance threshold that must be reached before the holdings are rebalanced. for example, if you enter 5, rebalancing will only take place if the allocation increases or decreases from the original setting by 5% or more for at least one security in the portfolio.
Subsequent Allocations - In this window, you can specify multiple asset allocations for a portfolio to rebalance to over time.
Use the drop-down menu associated with the Allocation Update Frequency field and select Annually, 2 Years, 5 Years, 10 Years, Custom, or None. Note: If you select a standard time period, the number of Time Period columns depends on your selection from the Allocation Update Frequency field and the start and end date of the illustration. If you select Custom, you can enter up to 15 sets of allocations.
If you selected a Custom allocation update frequency, click in the header columns and enter dates for each subsequent allocation in the mm/yyyy fromat. Note: When you hover over the date heading of a column, a down arrow appears. To remove a subsequent allocation time period, click the down arrow and choose Delete Column.
Enter allocation percentages for each investment under each time period. Each column must total 100%.
When you are finished, click OK to return to the Reinvestment/Rebalance tab.
Grid Columns
Note: To remove an item from the grid view, right-click on the line item and select Delete. If you delete an investment by mistake, or if you change your mind after deleting it, you can always re-add it from the Investments tab.
Using Apply to All - This feature allows you to apply the same input for an entire column of securities. Type or select the value you would like to apply to an entire column in the row marked Apply to All (located at the top of the list of securities).
List Order - To reorder items in the list, click in the List Order column and enter a new number, then press Enter.
Reinvest
Div/Income - Use the drop-down menu to select Yes to reinvest dividends and income distributions. Click No if you do not want reinvestments made to a holding.
Return of Capital (ROC) distribution calculations are taken into account if the Div/Income is set to Yes. ROC distributions are included as cash flows and reduce the cost basis when distributed. ROC distributions are not taxed in the year they are distributed, since the cost basis is reduced, the tax impact occurs upon liquidation. An ROC distribution is a type of payout from a mutual fund which is not interest, dividends, or capital gains. Capital that an investor has in a fund can be defined as the combination of the original investment amount and any growth not allocated as a capital gain. An ROC payout gives the investor back a part of this capital.
Cap Gain Dists - Use the drop-down menu to select Yes to reinvest capital gains distributions. Click No if you do not want reinvestments made to a holding.
Note: If you choose not to reinvest, you may notice the total Reinvestment, Taxes Paid, and Final Market Value (shown in the Hypothetical report) of your portfolio decrease because you own fewer shares.
Rebalance - You can periodically restore the investments to a predetermined composition. This restores the portfolio's asset allocation and risk return profile.
Rebalance % - Type percentages to restore the asset allocation composition of the portfolio. Rebalanced percentages for all securities in the portfolio must add up to 100%.
Initial Allocation % - These are the allocation percentages originally selected for the investments (on the Buy tab).
See Also