Rebalancing is the process of reviewing of stocks/ETFs of a smallcase to ensure that it continues to reflect the underlying theme or strategy. You can see the next expected update date on the smallcase page under the Stocks & Weights tab.
- Rebalancing takes into account fundamental factors, company updates, etc. to objectively narrow down on the right stocks/ETFs & their weightage.
- Stocks/ETFs & their weightage may be changed, based on the criteria of the smallcase.
Rebalancing isn't done automatically. When a smallcase you hold has been rebalanced, you receive a Rebalance Update notification for the same via e-mail and push notification (on the mobile app) and you can simply apply it in just 1 click.
If you wish not to sell/buy a particular stock, you can edit the rebalance update as well before confirming the update. You can also skip the update, no worries - you'll still receive future rebalance updates until you exit.
If you skip a rebalance update, your smallcase holdings, composition & returns may vary from the original. Also, your smallcase will not reflect the underlying theme/model as intended.
To place/complete a rebalance order, you will need to have the complete funds required for the included buy transactions in your usable margins. This is in effect from Aug 1, 2020. You can read more on it here.