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How-to guides

Rebalancing in LUSID is the process of using portfolio valuation metrics and rebalancing algorithms to see how a portfolio could be brought in line with a target, then generating the orders needed for the portfolio to meet that target.

Once order fills have been allocated and booked as transactions in a portfolio, the transactions are used to generate holdings, which can then be valued, with LUSID offering an abundance of valuation metrics. LUSID can use these valuation metrics to create more orders if you need to rebalance the portfolio, and automatically kick off the order lifecycle where necessary.

For example, as a Portfolio Manager you might hold 150 AAPL US equity shares with a market value of $25,000 in one of your portfolios but want to bring the target market value down to $0. You can rebalance your portfolio to have LUSID create an order to sell 150 units of AAPL US equity shares, which can then be checked for compliance before being sent to a Trader for blocking, and so on.

Rebalancing algorithms create a set of target orders, or order instructions, one per instrument with a specified quantity, weight or (coming soon) value. Order instructions show you the orders you would need to bring your portfolio in line with your chosen algorithm. You can then choose to generate actual orders from the order instructions with the click of a button, make adjustments to the orders before proceeding or try out a different algorithm. 

LUSID allows you to use a variety of rebalancing algorithms out-of-the-box, or create your own custom rebalancing algorithms, to automate portfolio rebalancing and subsequent order creation. Read more on creating your own rebalancing algorithms.

You can interact with LUSID's rebalancing tools using the LUSID web app, via Dashboard > Rebalance: