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Spring portfolio review: allocation, costs, goals — what to check once a year
Key takeaways
- An annual portfolio review does not mean reshuffling — it means checking that weights match the plan and whether your goals or life situation have changed.
- Allocation drift (deviation from target weights due to market movements) is normal — rebalancing corrects it, ideally through new purchases rather than sales.
- Fund TERs change — once a year check whether the issuer has cut the fee or whether a cheaper alternative exists for the same exposure.
- Life situations evolve — horizon, liquidity needs or the level of regular contributions can change, and the allocation should reflect that.
- A review should take no more than an hour — if it takes longer, the portfolio is probably unnecessarily complex.
1. Check your allocation
After a year of market movements, fund weights in the portfolio shift — this is called allocation drift. If you planned 80% IWDA and 20% EIMI but technology grew strongly last year, you may now have IWDA at 88% and EIMI at 12%. That is normal — and rebalancing will correct it. The most elegant approach: direct new purchases towards the underweighted position. Try to avoid sales — they trigger tax obligations.
2. Check your costs
Fund TERs change. Large issuers such as iShares, Vanguard and SPDR regularly reduce fees on their most popular funds. Once a year check on justETF whether:
- your fund has had its TER cut,
- there is a newer or cheaper ETF for the same exposure,
- your broker has changed its trading or account fees.
For funds with a TER above 0.5% it is worth checking alternatives — especially for thematic ETFs.
3. Check your goals and situation
The portfolio should reflect your current life situation — not the one from when you built it. Questions to answer:
- Has my investment horizon changed? (is a large expense approaching, change of job, family?)
- Has my risk tolerance changed?
- Do I still have an adequate emergency reserve outside investments?
If the situation has changed, it may be time to move to a more conservative allocation — or conversely to add a riskier component if time and stability have increased.
What not to change
A spring review is not an opportunity to reshuffle the portfolio based on last year's returns. Selling what has fallen and buying what has risen is a classic timing mistake. The long-term plan remains valid — the review merely calibrates it. A portfolio-building guide is in the article how to build your first portfolio. An overview of return projections is on the projections page.
FAQ
How often should I rebalance my portfolio?
For most long-term investors once a year is enough. If the portfolio rises or falls sharply, it may make sense to rebalance when a threshold is crossed (e.g. a 5% deviation from target weights), but for a simple 2–3 ETF portfolio an annual review is perfectly sufficient.
Do I have to sell funds when rebalancing?
Ideally not. Direct new contributions to the underweighted position — this returns you to target weights without tax implications. Only sell if the deviation is too large or new contributions are insufficient to restore balance.
How do I find out whether a cheaper alternative to my ETF exists?
justETF.com allows you to filter ETFs by index and sort by TER. Enter your underlying index (e.g. MSCI World) and compare available funds. Before switching, also factor in transaction costs and the tax implications of selling the existing fund.