Your portfolio today
One fund per line, with what it's worth today and the weight you want it to have. Target percentages must add up to 100.
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What to do with the new money
| Fund | Value today | Weight today | Target | Deviation (points) | 5/25 band | Contribute | Weight after |
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If the contribution isn't enough: the transfer
Your contribution isn't enough to close the gap. The next step isn't to sell — it's to transfer: transfers between mutual funds aren't taxed in Spain, so they restore your portfolio without triggering a tax bill. Here are the moves needed:
| Fund | Move | Amount |
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A transfer between funds typically takes two to five business days, and during that time the money is out of the market. That's a small price to pay compared with the tax cost of selling. If your funds are ETFs instead of traditional mutual funds, each sale does realize a taxable gain.
Where each weight stands
The black line is your target; the shaded band is the ±5-point range within which the rule says not to touch anything.
The 5/25 rule and the order that matters
- Check the bands before touching anything. Only act if a holding drifts five absolute points (the 60 reaches 65 or drops to 55) or 25% relative (a 10% position reaches 12.5%). Outside those bands, the best move is not to look.
- New contributions first. Direct incoming money to the lagging asset. It's free, automatic, and has no tax consequences.
- Only transfer if that's not enough. Transfers between mutual funds are tax-exempt; selling is the last resort, not the first.
- One annual check-in, and that's it. Thirty minutes a year: check the bands, update your contribution if your income went up, and reread your plan. The complete system takes less than two hours a year.
Rebalancing is the one time you'll systematically sell high and buy low, without having to be right about anything. This example uses a 60/40 portfolio that wakes up at 70/30; you can use as many funds as you like. If you're in the middle of a sharp downturn, the rule is strict: rebalancing only when your bands are triggered is the one action allowed.
What each figure means
A quick look at every field and every result.
What that fund or position is worth right now, based on its latest valuation.
The weight you want that position to have in your portfolio. All targets together must add up to 100.
This month's contribution, a bonus, extra pay... This is what gets split among the lagging positions, without selling anything.
How many points a position has drifted from its target, and whether that already triggers the rule: 5 absolute points, or 25% relative to its own target.
How much of your new money goes to this position — everything is directed to the laggards, in proportion to what they're short.
How each position looks after distributing the contribution, before any transfer.
How to use this calculator
Steps to rebalance your portfolio (expand)
- Fill in "Your portfolio today." One fund per line, with what it's worth today and the target weight you want. Targets must add up to 100%.
- Enter the new money you're going to contribute. This month's contribution, an extra payment, or a bonus: it's the least costly tool for correcting drift.
- Look first at "What to do with the new money." Correcting by contributing to what's lagging has no tax cost. Selling does. This is always the first resort.
- If the contribution isn't enough, move to the transfer. Between mutual funds, a transfer isn't taxed in Spain: that's why rebalancing this way is cheap.
- Respect the 5/25 band. If no position is outside its band, the right move is to do nothing. Rebalancing more than necessary adds cost without improving the outcome.
Frequently asked questions about this calculator
Why check bands instead of always rebalancing on a fixed date?
Because outside the bands, the best move is to leave things alone: every move carries an opportunity cost, and selling can carry a tax cost too. The bands (5 absolute points or 25% relative) mark the point where the drift is large enough to justify acting.
Why does new money go first, before a transfer?
Because directing new money to the laggard is free and has no tax consequences — it simply decides where money you were already going to invest goes. The transfer is the next step, only if the contribution isn't enough to close the gap.
Does this work the same way if my funds are ETFs instead of traditional mutual funds?
The "directing new contributions" part does. But transfers between ETFs are not tax-exempt: each sale realizes a taxable gain, unlike transfers between Spanish mutual funds.
How often should I review this?
Once a year is enough: check the bands, update your contribution if your income went up, and reread your plan. The complete system takes less than two hours a year.