How portfolio rebalancing works
Charityvest for Advisors automates portfolio rebalancing for client DAFs.
With Charityvest for Advisors, client donor-advised fund investment portfolios are automatically rebalanced in two instances:
This means, as their advisor, you do not need to worry about actively monitoring the individual assets in a client's donor-advised fund Invested account portfolio. You also do not need to manually raise cash to fund client grantmaking efforts.
Instead, you can focus on what matters - making appreciated asset contributions on behalf of clients, selecting the custom portfolio that best serves your clients giving strategy, sharing meaningful giving opportunities, and more.
Rebalancing when client activity occurs
Every time an action occurs on a client account, their Invested account balance will automatically rebalance to ensure sufficient cash is available and their target allocation is met. This includes:
When a contribution is made by the client or on their behalf: when additional balance is added to a client's Invested account, the new funds will be used to purchase stocks that are underweight relative to the target allocation, bringing the portfolio more in line to target.
When your client requests one or more grant(s): when a client requests one or more grant(s) to charity, investments are liquidated automatically to fund the grant(s) and ensure target allocation is maintained. The priority is to sell stocks that are overweight relative to target, so that each grant brings the fund closer toward its target allocation. If liquidation is in progress for one grant and your client makes an additional grant request, the rebalance activity will be adjusted to avoid unnecessary buy/sell transactions.
When charity gift cards are sent: when a client sends a portion of their balance via a virtual gift card, investments are liquidated automatically to fund the gift card amount and ensure target allocation is maintained. The priority is to sell stocks that are overweight relative to target.
Rebalancing for alignment with target allocation
If no activity has occurred over a period of 30 days on a client's Invested account, there is still a chance that fluctuations in stock values have migrated your client's portfolio away from target. To accommodate this scenario, we will automatically rebalance the account to bring it back in alignment with your desired allocations.
Curious to learn more about your firm's custom DAF program? Contact your firm's program manager for program-related matters or Charityvest (support@charityvest.org) for platform-related matters.
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