{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,10,5]],"date-time":"2026-10-05T20:55:24Z","timestamp":1791233724205,"version":"4.1.0"},"posted":{"date-parts":[[2026]]},"group-title":"SSRN","reference-count":0,"publisher":"Elsevier BV","license":[{"start":{"date-parts":[[2026,1,1]],"date-time":"2026-01-01T00:00:00Z","timestamp":1767225600000},"content-version":"unspecified","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by\/4.0\/"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"abstract":"<jats:p>Target-date funds (TDFs) must stay close to their intended asset mix while also adjusting over time along a glide path. That creates an implementation challenge: how to rebalance efficiently without generating unnecessary trading costs. In this paper, we show that rebalancing design matters materially once transaction costs are taken into account. In particular, a threshold-based strategy with a destination can reduce trading costs by breaking large trades into smaller pieces, which is especially valuable when market impact rises nonlinearly with trade size. In our setting, choosing a more efficient rebalancing destination lowers trading costs by about 80% relative to a less efficient approach, while preserving portfolio objectives. The framework also improves the scalability of TDFs and has broader relevance for other multi-asset portfolios where implementation costs and market impact matter. KEY FINDINGS \u25aa Transaction cost can materially change the Preferred rebalancing strategies. Rebalancing methods that appear similar before costs are considered can differ sharply once realistic implementation costs are included. \u25aa Rebalancing destination is a major driver of cost savings. A threshold-based approach with a destination can reduce trading costs by about 80% by spreading trades over time and avoiding unnecessarily large transactions. \u25aa The benefits extend beyond TDFs. This framework can help large multi-asset portfolios scale more efficiently, while also raising an important implementation question: whether glide-path changes and day-today rebalancing should be managed jointly or separately..<\/jats:p>","DOI":"10.2139\/ssrn.7560958","type":"posted-content","created":{"date-parts":[[2026,10,5]],"date-time":"2026-10-05T20:22:24Z","timestamp":1791231744000},"source":"Crossref","is-referenced-by-count":0,"title":["Managing Trading Costs in Target-Date Funds: Threshold Rebalancing with a Destination"],"prefix":"10.2139","author":[{"given":"Yu","family":"Zhang","sequence":"first","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Ankul","family":"Daga","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"78","container-title":[],"original-title":[],"deposited":{"date-parts":[[2026,10,5]],"date-time":"2026-10-05T20:22:25Z","timestamp":1791231745000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.ssrn.com\/abstract=7560958"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2026]]},"references-count":0,"URL":"https:\/\/doi.org\/10.2139\/ssrn.7560958","relation":{},"subject":[],"published":{"date-parts":[[2026]]},"subtype":"preprint"}}