Any idea when the rebalancing is taking place? i guess it is more then a single day as they have a lot of positions to change but is there any official date to this or it depends when the funds managers feels like it?
This post is just as much a questioning, as much as it is a comment on what I *think* to be true. I'm not clear which pensions you are referring to, but fiscal years and therefore budgets for US, Federal, State, and municipalities are different. The US Federal government fiscal year begins/began October 1. About 80% of US States have a fiscal year which begins/began on July 1, and municipalities can differ from the home state, and even differ by department (fire, police, etc). Of course (public or private) corporate fiscal year-ends differ as well. What I know for sure are the links between pensions at all levels of government, interest rates, and taxes.
%% SEPT, but that was mostly bullish. Below 200dma most of them have to sell, simply because so many painic [aka panic]sellers decided they did not want to be in stocks in a bear market.
As t-winks implied, it's a fiscal year thing -- but the key idea is that the rebalancing is *concluded* by that date. It could happen (*does* happen) all quarter long. (And longer!)
THis stuff is usually being done when some "benchmarks" have been hit or are under water. Pretty much stupid - as all "others" use the same benchmarks. Draw your own conclusions what this means for "Mr Equity Market". On the other side, Warren Buffet has a hell of a time when these benchmark kids are being hit. That´s usually the time, when the Oracle starts to buy the cheap(er) stuff.
No. Rebalancing is needed when a fund's constituent parts are out-of-balance [!!] with its intended portfolio weights. This may happen because XYZ has fallen, or simply because ABC has climbed.