Asset Allocation Drift Calculator
Deviation from target allocation triggering rebalance.
Calculate drift between current and target asset allocation to decide if rebalancing is needed. Enter equity to see drift percentage and rebalance flag.
What this tool does
Asset allocations drift over time as different assets perform differently. This calculator measures how far your current allocation has moved away from your target by comparing your current equity percentage to your target equity percentage. It then estimates the size of that deviation and indicates whether it has crossed your rebalance threshold—the point at which you might take action to realign your portfolio. The drift figure represents the percentage-point gap between where you are and where you intended to be. Results depend most heavily on the difference between current and target allocations, as well as the threshold you set. For example, if equities have outperformed and now represent a larger share of your portfolio than planned, drift will be positive. This calculation is for educational illustration and does not account for transaction costs, timing considerations, or other portfolio dynamics.
Quick answer: with the default values, the result is 8.00 percentage points (Allocation Drift). Adjust the values below for your own figures.
Enter Values
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Formula Used
Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Target 60% equity / 40% bonds, current 68% / 32%: 8 percentage point drift. Threshold-based rebalancing typically 5% drift triggers action. Under 5% is commonly treated as within tolerance; 10%+ is often treated as a trigger — extended drift changes the risk profile meaningfully.
Quick example
With current equity of 68% and target equity of 60% (plus rebalance threshold of 5%), the result is 8.00 percentage points.
Which inputs matter most
You enter Current Equity %, Target Equity %, and Rebalance Threshold.
What's happening under the hood
Standard drift calculation.
Where to go next
This calculation rarely sits alone in a planning exercise. If you're running these numbers, related tools include the portfolio rebalancing calculator, the portfolio rebalancing frequency calculator, and the digital asset portfolio calculator — each one answers a different question in the same territory.
Why a portfolio drifts on its own
Allocation drift is what happens when one part of a portfolio grows faster than the rest. Nothing is bought or sold, yet the mix moves: a 60/40 split that runs through a strong equity year arrives at 68/32 without a single trade. The calculator measures the gap in percentage points and compares it against the threshold you set, so at the defaults an 8-point drift against a 5-point threshold is flagged.
Threshold against calendar rebalancing
Threshold rebalancing and calendar rebalancing answer the same question differently. A threshold responds to what markets actually did; a fixed date responds whether or not anything moved. Wider thresholds mean fewer trades and more variation from target, narrower ones the reverse. The calculator takes the threshold as an input rather than assuming one, because the level that suits a portfolio depends on dealing costs, any tax on disposals, and how much variation from the target is acceptable.
Your portfolio has drifted 8.00 percentage points from the target allocation of 60%, currently at 68%.
Inputs
| Action | Above threshold |
|---|---|
| Current Equity | 68.00% |
| Target Equity | 60.00% |
| Threshold | 5.00% |
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
The calculator computes allocation drift by taking the absolute difference between your current equity allocation percentage and your target allocation percentage. It then compares this drift value against your specified rebalance threshold. If the drift exceeds the threshold, the calculator flags that rebalancing may be warranted. The model assumes allocations remain static between review periods and does not account for transaction costs, tax implications, or the timing of market movements. It treats drift as a simple point-in-time measure and does not model the impact of repeated rebalancing on long-term returns or portfolio volatility. This calculation is a straightforward monitoring tool to identify when portfolio composition has drifted from its intended targets.
References
Frequently Asked Questions
Typical threshold?
Tax-efficient rebalance?
Volatile drift?
Age-based shift?
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