PP Tracking Error
Posted: Sat Aug 27, 2011 7:52 am
According to ETFREPLAY.COM, the PP is up 10.4% YTD. However, that assumes you're able to maintain a strict 25% allocation across the four assets.
Frequent rebalancing will cause tax consequences and transaction fees that will eat into the return and cause a tracking error compared to a constant 25% allocation. So what is the consensus opinion on frequency of rebalancing and rebalancing bands?
Thanks,
Ed
Frequent rebalancing will cause tax consequences and transaction fees that will eat into the return and cause a tracking error compared to a constant 25% allocation. So what is the consensus opinion on frequency of rebalancing and rebalancing bands?
Thanks,
Ed