Rebalance and Reconstitution What's the difference？

Rebalancing refers to adjusting the weights of different assets in a portfolio to maintain a desired asset allocation. This is typically done periodically to ensure that the portfolio stays aligned with the investor's goals and risk tolerance.

Reconstitution, on the other hand, refers to making changes to the composition of a portfolio by adding or removing assets. This is typically done when an investor wants to make significant changes to their investment strategy or when the market conditions have changed significantly.

In summary, rebalancing is a routine process of adjusting the weights of assets in a portfolio to maintain a desired asset allocation, while reconstitution involves making more significant changes to the composition of a portfolio.