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Rebalancing at the Asset Class Level
There is a discussion on rebalancing asset class weight in reading 12. Why does an asset class with a higher correlation with the rest of the portfolio justify a wider rebalancing range compared to an asset class with a lower correlation.
I am thinking that it is because the higher correlation will cause larger swings in the portfolio's value, and it would lead to frequent rebalancing if the rebalancing range was tight. Is that correct?