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See what rebalancing would have cost — and what it would have earned — on your actual portfolio
The Backtest tab runs a historical rebalancing simulation on your actual portfolio holdings. It compares three strategies — buy-and-hold, threshold-triggered rebalancing, and quarterly rebalancing — and shows CAGR for each alongside a full India tax breakdown (LTCG/STCG per financial year). This lets you answer: would periodic rebalancing have improved my returns, and what would the tax cost have been?
The Backtest tab is a rebalancing simulation — not a free-form historical return lookup. It takes your actual holdings and trade history, freezes them at a chosen start date, then replays history to compare three portfolio management strategies side by side.
| Strategy | How It Works | Lines in Chart |
|---|---|---|
| Buy-and-Hold | No rebalancing. Portfolio drifts freely from target weights as prices move. | 1 line (net = gross, no tax events) |
| Threshold Rebalancing | A rebalance fires at the next quarter-end when any stock deviates beyond the threshold % from its target weight. | 2 lines — Gross-of-Tax and Net-of-Tax |
| Quarterly Rebalancing | Fixed rebalance every quarter-end (March, June, September, December) regardless of drift. | 1 line (net of tax only) |
All four lines start from a base NAV of ₹1,000 — so the chart shows relative performance of each strategy, not absolute rupee returns. Price data comes from Yahoo Finance monthly closing prices.
Presets: Inception (your first ever trade), Last 1Y / 2Y / 3Y, or a Custom month and year. Your lot history is frozen at this date — only trades recorded before the start date enter the simulation. Trades made after the start date are ignored.
Default 5%, range 1–20%, step 0.5%. This is the drift tolerance for the Threshold Rebalancing strategy. A stock with a 20% target weight triggers a rebalance when its actual weight rises above 25% or falls below 15% — and the rebalance fires at the next quarter-end (March, June, September, or December).
| Threshold | Effect | Best For |
|---|---|---|
| 2–3% | Very frequent rebalancing — high tax, tight drift control | Concentrated portfolios where position sizing is critical |
| 5% (default) | Moderate frequency — quarterly at most during trending markets | Most diversified portfolios |
| 8–10% | Infrequent — only rebalances after large moves | Long-horizon investors wanting to minimize tax events |
Controls which lots are sold first during each rebalancing event:
When a stock in your portfolio lacks Yahoo Finance price data going back to the start date:
Enter your ideal allocation % for each stock in the table. Total must equal 100%. Set a stock to 0% to exclude it completely from the simulation. Click ↺ Reset to current to prefill from your actual portfolio's current allocation percentages as a starting point.
The chart plots four lines over the simulation period, all starting from ₹1,000:
| Line | What It Shows | CAGR Label |
|---|---|---|
| Buy-and-Hold | Portfolio NAV with no rebalancing. Stocks drift freely. | Hold CAGR |
| Threshold (Gross) | Threshold rebalancing NAV before tax payments | Threshold Gross CAGR |
| Threshold (Net) | Threshold rebalancing NAV after India LTCG/STCG tax | Threshold Net CAGR |
| Quarterly (Net) | Forced quarterly rebalancing NAV after tax | Quarterly Net CAGR |
The gap between Threshold Gross and Threshold Net is the tax drag — the percentage of the rebalancing benefit consumed by LTCG and STCG payments. A wide gap suggests that rebalancing this particular portfolio has significant tax costs; a narrow gap means the rebalancing mostly triggered LTCG (lower rate) or stayed within the ₹1.25L annual exemption.
Below the chart, the Summary shows CAGR for all four lines, total tax paid under Threshold and Quarterly scenarios, and the tax drag %. It also shows how many rebalancing events fired in each scenario and how many stocks were excluded due to limited history.
A table showing each India financial year (Apr–Mar) with:
A timeline of every rebalance that fired in the simulation — the date, which stocks were overweight/underweight, and the direction of each trade. This log shows how frequently the threshold triggered and whether rebalancing was concentrated in specific market periods.
The simulation assumes every rebalancing trade executes at the month-end closing price with zero slippage. In reality, large rebalancing trades in mid- and small-cap stocks move the price against you — the actual execution price will be worse than the month-end close used in the simulation.
Zero brokerage, Securities Transaction Tax (STT), exchange fees, or capital gains tax impact on trade timing are modelled. Frequent rebalancing at a 2–3% threshold in a real portfolio would incur material transaction costs that would reduce the net-of-tax CAGR shown in the simulation.
The simulation only includes stocks currently in your portfolio — stocks you sold after losses are not present. This means the buy-and-hold line only shows the performance of your "survivors" — not the full history including stocks you exited. The buy-and-hold line may look better than it would have in real time.
The tax model uses post-July 2024 rates (LTCG 13%, STCG 20.8%, ₹1.25L annual exemption). It does not model:
Price history comes from Yahoo Finance monthly closing prices. Data gaps, corporate action adjustments, or symbol changes can affect results for specific stocks — particularly older mid-cap holdings. Stocks with insufficient history are excluded or truncated based on your Limited History setting.
Run the simulation with your actual target weights from Inception. Compare the Buy-and-Hold CAGR against Threshold Net CAGR. If buy-and-hold wins, your winners are your best performers — rebalancing would have trimmed them and bought weaker stocks. If threshold rebalancing wins, periodic trimming would have added value. Let the data from your specific holdings answer the question, not generic theory.
Run the simulation twice — once with FIFO and once with HIFO, same start date and weights. Compare Total Tax Paid in the Summary. For portfolios where most trades are old (many LTCG-eligible lots), FIFO often produces less STCG. For portfolios with many recent purchases at different prices, HIFO can reduce total gains more efficiently. The answer depends on your specific lot history.
Run three times: Threshold 3%, 5%, and 10%. Compare Threshold Net CAGR and Total Tax Paid across runs. A tighter threshold produces more rebalances — if the incremental CAGR improvement does not compensate for the higher tax bill, a looser threshold is better for your specific portfolio.
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