Why portfolios drift
You decided 50% flexicap, 30% asset allocation, 20% global. Then the flexicap fund had a great year. Now it is 65% of the portfolio and your risk is higher than you chose, without a single decision on your part. Rebalancing is the discipline of trimming what grew and topping up what lagged, which quietly sells high and buys low.
Step 1: set targets
- Open a portfolio and click Allocations.
- Give each fund a target percentage; they must add up to 100. New funds you plan to buy can be added with a target and no units.
- Save. Every holding now shows current next to target, and you can see at a glance which fund is above or below.
Targets are your decision. The app cannot know how much risk you want; it only measures the distance from what you chose.
Step 2: watch the drift
Drift is current minus target. When any fund drifts more than the portfolio's threshold (5% by default, adjustable per portfolio) the portfolio shows Rebalance needed with each fund's current → target, the drift in points, a bar, the rupee amount and the action: reduce or add. The same portfolio appears under Rebalance needed on the dashboard and in the daily family email.
Step 3: fix it one of three ways
| Method | What the app computes | When to use it |
|---|---|---|
| Adjust SIP | Next month's SIP split: the overweight fund gets ₹0, the funds that are short get more, the total stays your monthly SIP (for example ₹22,000 + ₹18,000 = ₹40,000). | The default for most families. Nothing is sold, no tax, no exit load; it takes a few months. |
| Lump sum | How much new money, into which funds, brings everything to target without selling: for example ₹6.9 L split across the two funds that are short. | When a bonus or a maturing FD gives you new money. |
| Buy and sell | Sell ₹3.5 L of the overweight fund, buy ₹1.9 L and ₹1.5 L of the others. | Only when there is no other way: it triggers capital gains tax and possibly exit load. |
Click Rebalance on the portfolio to open the three tabs. For Adjust SIP the app needs your monthly SIP: set it once with Edit on the portfolio.
Funds that no longer accept money
Many international funds stopped accepting lump sums because of the overseas investment limit; some very large funds close for fresh money; and sometimes you simply decide not to add to a fund. Hover on the fund and use the icons to mark it SIP only (running SIP continues, no new lump sum suggested) or blocked (nothing new). The rebalance adjusts itself: targets are rescaled across the funds that still accept money (30% becomes 33%, 50% becomes 55%), the lump sum plan skips the blocked fund, and Adjust SIP moves its SIP amount to the others.
Below its high is not a rebalance signal
Next to Rebalance needed sits the Below high box: funds 5% or 10% below their own all-time-high NAV. It is a different thing. Drift is about your mix; below-high is about price. The app shows both as facts and recommends nothing; what you do with either is your decision.
Rebalancing and goals
Portfolio targets are per fund. Goals add a second layer: each goal has an equity/debt target that falls as the date comes near (the glide path), and the goal planner suggests which funds to move when a goal drifts from its path. Classify your funds in the fund breakdown so that layer knows what is equity and what is safe.
What it looks like
Each fund against its target and its own high, on one portfolio page.
- Flexi cap fund 7% below high₹28.4 L
- Multi asset fund₹13.3 L
- Global index fund SIP only₹11.4 L
- Bank FD · safe₹12 L
Every fund, SIP, switch and sale from one CAMS statement. Money-in is real cash, not switched profit. Each fund is compared with its own high every day.
Last updated 15 Oct 2026 · by Jagadeesh Manne, who built Capital Friends for his own family.
Track the real thing, not just the estimate
Capital Friends is a free, open-source portfolio tracker for Indian families. Import your CAMS statement, see XIRR and CAGR for every fund, plan goals and retirement, and let your family get one summary email. Your data stays in your own Google Drive.
Frequently asked questions
How often should I rebalance a mutual fund portfolio?
Most families check once or twice a year, or whenever a fund drifts more than about 5 points from its target. The app watches the drift daily so you only act when it matters.
Is rebalancing by SIP really enough?
For a portfolio with a running SIP, usually yes: directing a few months of SIP to the funds that are short brings the mix back without selling or tax. Larger drifts need a lump sum or a switch.
Does rebalancing have tax?
Adjusting SIPs or adding a lump sum has no tax. Selling or switching triggers capital gains tax (and exit load inside the exit period), which is why the app lists buy-and-sell last.
What if a fund no longer accepts lump sums?
Mark it SIP only or blocked on the holdings table. The plans then rescale targets across the other funds and never suggest money into it.
Can the app rebalance for me?
No. It has no connection to any broker or AMC. It shows the exact amounts; you place the orders where you invest.
Read next
All family funds from one CAS import, with real money-in, XIRR and CAGR.
Goals on a road, funded from the money you already have, moved to safety on time.
Monthly SIP → value after N years, with optional yearly step-up.
Get your consolidated statement and import every transaction.
Calculators use the inputs you enter and standard formulas; results are estimates, not guarantees. Returns from mutual funds, stocks and other investments are not fixed and can be lower than assumed. Capital Friends is a tracking tool and is not a SEBI-registered investment adviser; nothing here is a recommendation to buy or sell any security.