You can initiate the rebalancing of your goals in just a few clicks. We've explained all the steps in detail here, and we've also added relevant FAQs on each of the pages to help clarify any queries that you may have.
We also have YouTube videos available for all the common FAQs on SIP and Portfolio Rebalancing. This will hopefully make it simple to understand the entire process and help clarify any doubts that you may have.
Follow these simple steps to be taken to the rebalancing page:
Home page → Menu (bottom right) > Mutual Funds > Rebalance Investments > Rebalance Portfolio.
You can refer to these screenshots and explanations below:
Note: As per the recent guidelines from SEBI, we are required to take your risk profile assessment and an e-sign before providing any kind of advisory (show our recommended funds, asset allocation while rebalancing etc). This is a one-time process, and if you haven't done this yet, you will be prompted to do so before seeing our recommendations.
You will see a screen like this:
If you have already taken the risk profile assessment, then you will only be prompted to provide the e-sign
Once these compliance requirements are completed, you will be shown the number of goals that require rebalancing. Please note that we only show a goal for portfolio rebalancing if there is some exit load-free amount that can be rebalanced.
On clicking 'Start Rebalancing', the screen will take you to some important information about rebalancing. We urge you to read through it patiently as it will clear most of the doubts you may have regarding the process.
On clicking 'Continue to Rebalance', you will be taken to the first goal that needs rebalancing. Here it will show you why the goal needs rebalancing. There can be 2 reasons why your goal needs it.
- Your asset allocation is different from your goal plan and needs rebalancing. This means that the equity: debt ratio is not matching the ideal ratio given your chosen risk level and time horizon of the goal. Either you have more debt than ideal in your goal or more equity than recommended in the goal plan (based on your inputs).
- Your current funds are not the same as our recommended funds. This means that there is some exit load-free amount invested in Mutual Fund schemes that are not currently recommended by Niyo Money. This can be moved to the currently recommended funds.
On clicking "Next", you will be shown exactly how much will be redeemed/switched out from each fund and how much will be invested in the new funds.
On this page, you will also be given 2 options to rebalance based on exit load and equity tax.
- Rebalance exit load amount: This will rebalance the amount that is exit-load free. This amount could have some taxable gains. For example, let's say you have Rs 1,10,000 worth of gains in an equity Mutual Fund, which is exit load free. This will be redeemed/switched out and invested in the recommended funds. This will ensure there is no applicable exit load but these gains will still be taxable as they are over Rs 1 lakh.
- Rebalance equity tax-free amount (Recommended): This will rebalance the amount in equity Mutual Funds that will also not incur any long-term capital gains tax in addition to being exit load free. So if you have gains more than Rs 1 lakh, it will only rebalance the amount less than that to avoid taxes. This is only applicable to equity funds as debt funds will always have tax (either long-term or short-term).
Both these options will ensure that debt funds are only recommended for rebalancing after they have crossed the Short Term Capital Gains (STCG) tax stage.
On clicking 'Review Rebalance', you will be shown the total redemption/switch-out amount and total re-investment amount with the likely date ranges for both respectively.
The redeemed amount will reach your bank account in 3-5 business days and thereafter the re-investment will be done via the auto-debit that you have registered with us.
So although the entire rebalancing may take about 10-15 business days (depending on your auto-debit limit), you won’t have to do a thing after you initiate the rebalance process.
Also, where possible we will use a switch transaction to combine redemption and re-investment between funds of the same Mutual Fund company (e.g. between funds of Birla Mutual Fund company). In the case of switches, the switch out from the old funds and switch into the new funds will happen without it reaching your bank account. To read more about switch transactions click here.
Nothing needs to be done at your end after this.
Please note: We have temporarily paused the Portfolio rebalancing option. This is because as per the recent guidelines from SEBI, users will have to confirm the redemption/switch/STP/SWP request by two-factor authentication.
The authentication needs to be done on a mobile number or email that is registered within the Mutual Fund records.