Portfolio a alokace
Portfolio Drift: How Weightings Shift on Their Own
Key takeaways
- Drift is natural — different assets grow at different rates and weightings automatically deviate from the target over time.
- Significant drift raises the portfolio's actual risk above your intention: equities overgrow and exposure ends up higher than planned.
- Drift doesn't need to be corrected immediately; it becomes relevant only at a 5–10% deviation from the target allocation.
- Checking weightings once a quarter or once a year is enough — not daily.
Portfolio drift is the natural divergence of asset weightings from the target allocation, caused by different asset classes growing at different rates. It's not a mistake — but it needs to be monitored.
How Drift Arises
Imagine you set up a portfolio: 80% equities, 20% bonds. Equities double in value over the next three years, bonds barely move. Suddenly you have 88% equities and 12% bonds — without having done anything. The portfolio carries more risk than you intended.
Drift accelerates in strong market trends. A bull market in equities typically produces rapid drift towards a higher equity share.
When Drift Is a Problem
Small drift (under 5%) is generally negligible — the transaction cost of correcting it would outweigh the benefit. Large drift (10% or more) becomes relevant because:
- the portfolio's actual risk profile differs from your intention;
- when equities correct, you lose more than you're psychologically prepared for;
- the portfolio no longer matches your investment plan and horizon.
How to Track Drift
A simple table is enough: target weight, current value of each component, current weight, deviation. Most modern brokers show portfolio breakdown directly in their app. Regular contributions redirected to the lagging component naturally correct drift without selling — as described in rebalancing without taxes.
Drift and a Long Horizon
One note: if you're a fully equity investor, drift isn't a concern for you — there are no other components whose weight could deviate. Drift mainly affects multi-component portfolios that combine equities with bonds, cash, or alternatives. More on building such a portfolio in the first portfolio guide.
FAQ
What is portfolio drift?
The natural divergence of asset weightings from the target allocation. It happens automatically because different assets grow at different rates. The result can be a portfolio carrying more or less risk than you intended.
When should I worry about drift?
When there's a deviation of roughly 5–10% from the target weight. Smaller deviations are negligible — the cost of correction would outweigh the benefit. Check weightings once a quarter or annually, not daily.
How do I correct drift without selling?
Redirect regular contributions to the component that has fallen below its target weight. The deviation gradually closes without the need to sell and incur fees or tax on realised gains.