How to set up Portfolio Rebalancer

How to set up Portfolio Rebalancer

Schwab's Portfolio Rebalancer is a rebalancing tool that allows you to rebalance a single account, household group, portfolio model group, or batch of accounts against one or more models and target allocations. Once the accounts have been rebalanced, Portfolio Rebalancer can create a trade file for transmittal or import into the Web Trading platform for validation and execution. Establishing target allocations Tooltip and securities-based models Tooltip is a prerequisite to rebalancing your client's portfolios. Investment universes Tooltip , while optional, allow you to manage lists of frequently used (or alternatively, tightly controlled) securities for use in model maintenance.

To set up Portfolio Rebalancer, you will need the following:

  • Trade Online Tooltip and Access Rebalancer Tooltip security functions with Schwab Advisor Center®
  • Securities (name, symbol, or CUSIP) for use with securities-based models and investment universes
  • Asset classes, capitalization, and style targets and/or sector classifications for use with target allocation models
  • Desired model composition

The Target Allocations tab of the Preferences page allows you to create or maintain target allocations based on custom security classifications. These allocations can then be used to create asset-allocation models for use in the rebalancing process. You can also import allocations to and export allocations from Portfolio Rebalancer.

To access target allocations, from the Trading menu, click Portfolio Rebalancer > Edit Portfolio Rebalancer Preferences > Manage Target Allocations.

To create a new target allocation:

  1. On the Preferences screen, click Create New Target Allocations.
  2. Provide a name, description, and setting level. Assign capitalization and style targets, and choose whether the target should be identified as taxable or non-taxable.
  3. Enter a percentage for each style or sector classification in your target allocation. The portfolio allocation must total 100%.
  4. Review your selections and allocation percentages.
  5. When you have finished your target allocation, click Done to return to the Target Allocation screen. Your new allocation model will appear in the Custom Target Allocations section.

To import a target allocation:

  1. On the Preferences screen, click Create New Target Allocations, and then click Import Target.
  2. Click Browse to search for your file. Select the file and click Upload.
  3. Validate the allocation breakdown. Click Save and Continue.
  4. Enter a name and description for the target allocation. Click Save and Continue.
  5. Make one last verification; then click Done.

To modify an existing target allocation:

  1. On the Preferences screen, click the link to the target allocation model you want to modify.
  2. Review the existing Target Allocations Summary and the Target Allocation Breakdown and click Save and Continue.
  3. Revise the name, description, and setting level (optional). Change the Target Allocation Attributes using the drop-down boxes (optional). Click Save and Continue.
  4. Change the Target Allocation Values. Click Save and Continue.
  5. Click Done to save the changes.

To export a target allocation:

  1. On the Preferences screen, click the link to the target allocation model you want to export.
  2. Review the existing Target Allocations Summary and the Target Allocation Breakdown and click Save and Continue.
  3. Click Export Target to bring up a Windows® dialog box for saving the file. Name the file and click Save and Continue.
  4. Click Exit. Click Exit the Rebalancer and then OK. This exported file may be shared with others at your firm for use within Portfolio Rebalancer.

To delete a target allocation:

  1. On the Preferences screen, click the box in the Delete column next to the target allocation, or click Check All to delete all the models.
  2. Click Delete.

The Model Portfolios tab of the Preferences page allows you to create and edit security-based model portfolios for use within a rebalance. You may create a new model derived from an existing target asset allocation, create a new model without using a target asset allocation, or create a new blended model. You may also import models to and export models from Portfolio Rebalancer.

To access model portfolios, from the Trading menu, click Portfolio Rebalancer > Edit Portfolio Rebalancer Preferences > Manage Model Portfolios.

To create a new model portfolio with an existing target allocation:

  1. On the Preferences screen, click Create New Model Portfolio with Target Allocations.
  2. Provide a model name, description, and, if eligible, setting level for the model. Select an existing target allocation to create a one-time allocation to use as a guide for your new model portfolio.
  3. Review the selected target classifications and breakdown. Click Save and Continue.
  4. On the Adjust Model Portfolio Weights screen, add securities to your model based on name, symbol, asset class, or investment universes Tooltip . You may also upload a previously exported model or load an existing model to serve as the basis of your new model.
  5. Assign allocation percentages to your securities. The securities allocations should total 100%. Click Auto Solve to instruct Rebalancer to correct the allocations, if needed.
  6. If desired, assign tolerance bands Tooltip   to your allocations. Tolerance bands effectively allow Rebalancer to consider the sale or purchase of shares of a position within tolerance so as to best meet the rebalancing goal (return to target, cash out, etc.).

To create a new model portfolio without an existing target allocation:

  1. On the Preferences screen, click Create New Model Portfolio without Target Allocations.
  2. Provide a name and description.
  3. Use the buttons across the screen to search for and add securities to your model based on name, symbol, asset class, or investment universes. You can also upload a portfolio file or another portfolio model to use.
  4. Assign allocation percentages to your securities. The securities allocations should total 100%. Click Auto Solve to instruct Rebalancer to correct the allocations, if needed.
  5. If desired, assign tolerance bands to your allocations. An existing portfolio with an allocation weighting inside the percentage bands of a model will not be rebalanced.

To import a model portfolio:

  1. On the Preferences screen, click Create New Model Portfolio without Target Allocations, and then click Upload Portfolio.
  2. Click Browse to search for your file. Select the file, click Open, and then Upload.
  3. Validate the securities. Click Save and Continue.
  4. Enter a name and description for the model. Click Save and Continue.
  5. Make one last verification; then click Done.

To create a blended model:

  1. On the Preferences screen, click Create New Blended Model Portfolio.
  2. Assign a name, description, setting level, and tax status to your blended model.
  3. Click on the boxes next to the models you want to include in your blended model. Click Add. The models you selected appear above the list. Enter weights for each model so they total 100%. You can also delete models from the blended formula by clicking the delete box in the column next to that model and then clicking Delete. Click Save and Continue.
  4. Review your selections on the Blended Model Portfolio screen. The system displays the security’s name and symbol, its weight, and its upper and lower tolerance bands. Click Done, or click Previous to go back and make changes.

To modify a model:

  1. On the Preferences screen, click the link for the model you want to modify.
  2. On the Target Portfolio Summary screen, review the model allocations. Click Save and Continue.
  3. If desired, change the fields in the Create Description section. Use the buttons across the screen to add securities to your model. To delete a security, click the corresponding box in the Delete column and click Delete.
  4. Adjust your allocations percentages so they total 100%. Click Auto Solve to instruct Rebalancer to adjust your allocations to 100. Click Save and Continue.
  5. Set new lower and upper tolerance bands. Click Save and Continue.
  6. Confirm your selection. Click Done, or click Previous to go back and make changes.
  7. Click Exit. Click Exit the Rebalancer and then OK.

To export a model:

  1. On the Preferences screen, click the link for the model you want to export. The system will display holdings for that model.
  2. On the Target Portfolio Summary screen, click Export Model Portfolio. This will trigger a Windows dialog box asking if you want to open or save your file.
  3. Click Save. The file can be shared with others in your firm for use in Portfolio Rebalancer. Click Save and Continue twice; then click Done.

To delete a model:

  1. On the Preferences screen, click the box in the Delete column corresponding to the model you want to delete, or click Check All to delete all models.
  2. Click Delete.
  3. Click Exit. Click Exit the Rebalancer and then OK.

Create and edit groups of securities you use most often to save time.

To access investment universes Tooltip , from the Trading menu, click Portfolio Rebalancer > Edit Portfolio Rebalancer Preferences > Manage Investment Universes.

To create a new investment universe:

  1. On the Preferences screen, click Create Investment Universe.
  2. Assign a name, description, and setting level to your investment universe.
  3. Use the buttons across the screen to search for and add securities to your investment universe based on name, symbol and asset class, or to add them from another investment universe. When ready, click Save and Continue.
  4. Review the Universe Summary. Click Done, or click Previous to go back and make changes.

To modify an investment universe:

  1. On the Preferences screen, click the link for the investment universe you want to edit.
  2. On the Universe Summary screen, review the investment universe. View the recent price of the security by clicking the link. Click Continue.
  3. If desired, revise the description. Use the buttons across the screen to add more securities. To delete a security from a universe, click the corresponding box and click Delete. Click Save and Continue.
  4. Review your investment universe. Click Done to save your settings or Previous to go back and make changes.

To delete an investment universe:

  1. On the Preferences screen, click the box in the Delete column next to the investment universe you want to delete.
  2. Click Delete.
  • After setting your preferences for allocations, models, and investment universes, you can customize Portfolio Rebalancer using advanced settings.
  • If you haven't already done so, use the Group Manager to create households, models, and batch groups to use in your rebalance. You will need the Access Group Administrator Tooltip   security function to use this tool.
  • When you have created your groups and customized your advanced settings, you can rebalance your portfolios.
  • Contact Advisor Platform Support at 800-647-5465 with questions or for help with Portfolio Rebalancer.

Resource: About extended-hours trading

Why am I unable to advance to the next screen when setting up a target allocation, model portfolio, or investment universe Tooltip

If you cannot continue to the next screen, check the top of the page for a yellow error message. You cannot advance in the workflow until you address the error.

Where do I set the tolerance bands Tooltip

The option to set tolerance bands appears if you create a blended model or a model without a predefined target allocation. The option to set tolerance bands appears after you have added the securities or models and their weights.

What security types does Portfolio Rebalancer accept? 

Portfolio Rebalancer can rebalance portfolios containing mutual funds, equities, exchange-traded funds, fixed income, and cash. Rights, warrants, options, securities priced under $.01, and short positions cannot be included in the rebalancing process. If the Rebalancer does not recognize a security, you can assign that security as a generic product (i.e., as an equity or fixed income) and it will be included in the rebalancing process.

Can I import my models and target allocations from PortfolioCenter®

If you maintain securities-based models in the Envestnet | Tamarac™ product PortfolioCenter, you can export those models from PortfolioCenter and import them into the Portfolio Rebalancer.

How to rebalance your portfolios
How to use advanced settings to customize Portfolio Rebalancer
How to use Group Manager
Introduction to Portfolio Rebalancer
Introduction to the Web Trading platform