Portfolio Drift Explained - FAQ

To calculate portfolio drift:

1. determine your target allocation
2. calculate your current allocation
3. subtract target from current for each asset

Example:

• stocks: 70% - 60% = +10%
• bonds: 30% - 40% = -10%

This difference is your portfolio drift.

Portfolio value: $100,000

Target:

• stocks: $60,000
• bonds: $40,000

Current:

• stocks: $70,000
• bonds: $30,000

Drift:

• stocks: +10% (+$10,000)
• bonds: -10% (-$10,000)

This means the portfolio is taking more equity risk than originally planned.

Want to see your own portfolio drift without using a spreadsheet? Try the Alignfolio demo dashboard.

Portfolio drift happens when your investment portfolio moves away from its original target allocation due to market changes.

For example, if one asset grows faster than others, it may take up a larger percentage of your portfolio over time.

This matters because your portfolio may no longer reflect the structure you originally set, including your intended balance between different asset types.

Portfolio drift can be tracked by comparing your current allocation to your target allocation.

This involves:

• calculating the percentage of each asset in your portfolio
• comparing it to your intended allocation
• measuring the difference (drift)

Tools like Alignfolio help visualize this difference clearly, showing both percentage and dollar changes.

A portfolio drift tracking tool is a tool that helps you monitor how your portfolio allocation changes over time.

It shows:

• current allocation
• target allocation
• deviation between the two

Alignfolio is designed as a simple, manual portfolio drift tracking tool focused on clarity and privacy.

No brokerage connections. No advice. Just clear drift tracking.

Alignfolio works by letting you manually enter your portfolio and target allocation.

Step 1 - Set your target allocation

• ETF 1 - 25% ($25,000)
• ETF 2 - 40% ($40,000)
• ETF 3 - 15% ($15,000)
• ETF 4 - 20% ($20,000)

Total portfolio: $100,000

Step 2 - Market changes over time

• ETF 1 → 27% ($27,000)
• ETF 2 → 45% ($45,000)
• ETF 3 → 16% ($16,000)
• ETF 4 → 12% ($12,000)

This change in allocation is portfolio drift.

Step 3 - Drift visualization

Alignfolio highlights drift using simple thresholds:

• 🟢 On Track (≤ 3%)
• 🟡 Moderate Drift (3-7%)
• 🔴 Off Track (> 7%)

Example:

• ETF 4: 12% vs 20% → -8% ($-8,000) → 🔴 Off Track

Step 4 - Understanding the difference

This shows that the position is approximately $8,000 below its target allocation.

Some users may choose to adjust their portfolio over time based on this information, while others may not.

Alignfolio does not provide recommendations. It simply shows the difference clearly so you can make your own decisions.

Many investors review their portfolio monthly, quarterly, or when there are significant market movements.

The frequency depends on personal preference, investment strategy, and how closely someone wants to track allocation changes.

Portfolio rebalancing is the process of adjusting your portfolio so it moves closer to its target allocation.

This can involve:

• adding to underweight assets
• reducing overweight assets
• adjusting future contributions

Different investors approach rebalancing in different ways depending on their strategy.

No.

Alignfolio does not tell you when to rebalance or what actions to take.

It is designed to provide a clear view of your portfolio allocation so you can decide how to respond.

Yes.

Alignfolio does not connect to brokerage accounts or external financial institutions.

All data is entered manually, which means:

• no account connections
• no third-party data sharing
• full control over your information

Manual tracking offers:

• greater privacy
• full control over your data
• no reliance on third-party integrations

It also avoids issues like broken connections or incorrect data syncing.

Alignfolio is designed for:

• DIY investors
• users who want to track portfolio allocation
• people who prefer privacy over automation
• anyone looking for a simple way to monitor portfolio drift

Free version:

• 1 portfolio
• current vs target allocation
• drift calculation with visual indicators

Pro version (US$29/year):

• drift history tracking
• monthly reminder emails
• market movement alerts (for example, when the S&P 500 moves by 5% or more)
• up to 4 portfolios

No.

Alignfolio is an educational tool and does not provide investment advice, recommendations, or financial planning services.

Alignfolio is designed to help you clearly understand your portfolio allocation and how it changes over time.

It does not provide investment advice or suggest actions. All decisions remain entirely up to you.