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Portfolio Rebalancing
When it comes to producing trade orders, Tamarac does all the heavy lifting for you
Whether you're rebalancing one account or thousands of households, Tamarac can do in minutes what would normally take days using a manual process.
Tamarac's system uses rules-based logic with a sophisticated rebalancing algorithm that makes trade recommendations based on your models, preferences and restrictions, while taking into account taxes and transaction costs.
Tamarac Advisor automatically ensures:
- Investment guidelines are checked and upheld
- Security and asset class goal weights, rankings and trading thresholds are calculated
- Short term gains disallowed
- Short term redemption fees disallowed
- Cash requirements for client and fees are met
- Minimum trade sizes are observed
- Tax consequences are taken into account
- Account restrictions are observed
- Legacy positions are taken into account
- A client-facing report is produced that details trade recommendations and rationale
- Trade lists are generated and formatted for multi-custodians
- SEC compliant trade report generated for easy storage
Tamarac supports a wide variety of security types:
- Stocks
- Bonds
- Mutual funds
- ETFs
- Alternative investments (private placements, SMAs, LPs, etc.)
Tamarac automates multiple rebalancing styles
Full Account Rebalance
Rebalancing is an inherent concept of diversification, where the goal is to create a portfolio that balances appropriate levels of risk and return. The discipline of rebalancing, in essence, controls risk and forces the portfolio to move along a predetermined course. It takes gains from stellar performers or favored asset classes, and reallocates them to lagging styles. That balance, once achieved, can only be maintained by periodically rebalancing the portfolio to maintain the appropriate diversification.
Best practice: Many of our clients observe a quarterly full account rebalance for all their clients.
Min/Max Rebalance
Rebalancing limits define the points when a portfolio should be reallocated to bring it back in line with the established asset allocation target. A min/max rebalancing style only rebalances the specific target allocations, or securities, that move above or below a set range.
The process of setting an appropriate rebalancing limit is somewhat subjective. Ordinarily, rebalancing limits of plus-or-minus five percent should keep the parameters tight enough to maintain the risk/return profile of the strategy, yet require rebalancing only once or twice a year. When it is necessary to rebalance, the fiduciary should determine the cash flows over the next quarter to determine if the portfolio can be rebalanced with contributions or disbursements.
Directed Trade
Tamarac makes it easy to conduct security specific directed trades across one or thousands of accounts while taking all your account preferences, restrictions and fees into account.
Set a specific percent of account value for a security and Tamarac will automatically determine the buys or sells across multiple accounts or households to accommodate the target percent. Direct a security to be liquidated and replace that position with another security or multiple securities at the weights of your choosing.
Using Tamarac you will:
- Save a tremendous amount of time in the regular maintenance of your portfolios
- Eliminate errors that are prone to manual rebalancing
- Scale your business without having to add headcount
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