Review & Monitoring
Portfolio Drift
Definition
The gradual shift in a portfolio's allocation away from its target as different assets grow at different rates.
Portfolio drift is the cumulative deviation between target and actual weights caused by market moves, cash flows, missed actions, or changing conviction.
Why it matters
It is silent and automatic. No decision is required for drift to happen. Only regular review catches it.
What most investors miss
The gap between what the term means and how it is usually applied.
They set an initial allocation and do not check it again. After a strong equity run the portfolio can be significantly more concentrated than intended.
How to read it
Measure drift at the consolidated level against the target allocation. Check it at fixed intervals not just when markets move.
Multi-account lens
How this term reads differently across brokers and accounts.
In a fragmented portfolio drift in one account is invisible to reviews that focus on another. Consolidated review is the only way to see total drift.
Concrete example
What this looks like with real numbers.
Scenario
In January: 60% equities, 30% bonds, 10% cash. After a 24% equity rally and no trades, the split is now 68% / 25% / 7%. The portfolio has drifted 8 percentage points from target equity exposure — without any action from the investor.
What it reveals
Drift is not a decision. It is what happens when markets move and no one is watching the portfolio-level picture across all accounts.
Related terms
Terms that connect to portfolio drift.
Rebalancing
The process of returning the portfolio to its target allocation after market movements have caused drift.
Alert Threshold
A predefined level of change in value allocation or a single position that triggers a portfolio review or action.
Allocation
How the portfolio's capital is distributed across asset classes geographies sectors or individual positions.
Continue only if the next question is clearer now
Diagnosis first, then workflow, then fit.
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