In establishing a portfolio, investors often start with a strategic asset allocation (SAA). This sets the proportion to be invested in each asset class in order to achieve your investment objective. Managed funds can make it easier to gain exposure to assets such as international shares, giving you an efficient pathway towards achieving your investment objectives.
After a period of investment, you may find that your initial asset allocation has changed, for example into a higher growth allocation. This is because some assets may grow more strongly than others and some assets may fall in value. Rebalancing your allocation can be done with new cash flows or by selling down and reallocating a portion of your portfolio. However if you are selling down assets, be aware of the tax consequences and seek tax advice.