What is fund rebalancing? Restructuring your MPF portfolio in one go

Last week this column covered fund switching; this time it turns to the other way of reshaping existing MPF balances — fund rebalancing. Both adjust the MPF mix, but they work in fundamentally different ways, and members should choose by personal need.

What is fund rebalancing?

Fund rebalancing means restructuring how existing balances are distributed: the service provider sells (redeems) every fund unit across the member’s entire MPF account, then reallocates the proceeds into a completely new set of funds per the new investment instructions. Unlike fund switching, which sells only designated funds, rebalancing requires no review of the existing holdings — members simply supply the new portfolio’s allocation, making it the more straightforward route.

Fund rebalancing vs fund switching

Aspect	Fund switching	Fund rebalancing
Scope	Designated fund(s) only	Every fund in the account
Mechanics	Sell all or part of specified fund(s), reallocate to new funds	Redeem everything, then buy into a brand-new mix
What you instruct	Which fund to sell — so you must know your current holdings	Only the new allocation — no need to review old constituents
Example	Sell Fund B, move into Funds C and D; Fund A stays put	Sell all of Funds A and B, move into Fund C (35%), Fund D (30%), Fund E (35%)

Think before you switch

Whichever route you take, decide first whether you want to overhaul the whole portfolio or just adjust one fund within it. Under the rules of the time, members were entitled to at least one free portfolio switch per year — check your scheme provider’s terms for details. To revisit each fund type’s risk profile, see the MPF education hub.

View all

What is fund rebalancing? Restructuring your MPF portfolio in one go