Hi Clive, Re: Rebalancing of ETF holdings on a periodic basis....
One thing I've been doing is mearsuring the drift of the Portfolio Control value of each holding from the original model. This is slightly different from measuring the direct value of each position against the original model.
Since the Price/Share has a "hold zone" range that can vary day to day, it seemed to make more sense to rebalance the PCs toward the model rather than the value of the holdings. This seemed a "gentler" adjustment.
Reducing the PC of the one that has drifted higher than its target then tends to push some selling. Increasing the PC of the one that has underperformed the group tends to push the buying.
So, it has the net effect of being similar yet won't necessarily drive buying or selling immediately. (it could, but usually only when the markets have been "dramatic" in their movements)
Best regards, Tom
Port Washington, WI 53074
