The Allocator Who Stopped Rebalancing

Overview

The guest describes moving a large institutional book away from calendar rebalancing toward band-based drift with explicit governance limits, why the investment committee resisted it, and what the first drawdown did to that agreement. Most of the value is in the governance detail rather than the portfolio theory.

Key takeaways

• Calendar rebalancing is a governance artifact more than an investment decision.

• Band-based drift only survives if the committee pre-commits in writing to the drawdown behaviour.

• The hardest part is not the policy, it is the reporting that makes drift legible to a board.

• Tax and transaction savings are real but second-order next to the behavioural benefit.

Topics

• Asset allocation
• Rebalancing
• Governance
• Institutional investing