ETFs are ideal tools for rebalancing to maintain a portfolio’s strategic asset allocation.
Over time, the varying returns of different asset classes will cause nearly every asset allocation to change, resulting in a change to the portfolio's risk and return characteristics. That's why we believe periodic portfolio rebalancing is important. ETFs' trading flexibility and ease of access make them ideal tools for rebalancing a portfolio back to its strategic asset allocation.
In a diversified portfolio, gains from some investments may help offset losses from others.
However, diversification does not ensure a profit or protect against a loss.