Learn/Calculators/Rebalancing and allocation
Drift calculator: is the portfolio outside its band?
A holding that outperforms grows past its target weight. Check the drift against a band and size the trade that would restore it.
- Formula shown
- Free, nothing stored
- Share your result as a link
01How it works
In plain words.
After returns, the holding’s weight is its grown value over the grown portfolio. The drift is the gap to the target. A band rule trades only when the drift is larger than the band; the trade sells the excess and buys the rest of the portfolio, so the traded value counts both sides.
The formula
Weight now = w(1 + ra) / (w(1 + ra) + (1 - w)(1 + rr))Drift = weight now - targetTraded value = 2 x |drift| x portfolio value now02Worked example
The default numbers, by hand.
A 20% holding up 30% while the rest rose 5%: its weight is 23.6%, a drift of 3.6 points, inside a 5 point band. At 40% it would be 25.0%, exactly on the band edge; at 60%, 27.6%, outside.
| Input | Value |
|---|---|
| Target weight | 20% |
| Its return since the last rebalance | 30% |
| Rest of the portfolio, return | 5% |
| Band, in percentage points | 5% |
| Portfolio value at the last rebalance | ₹10,00,000 |
| Result | Value |
|---|---|
| Weight now | 23.6% |
| Drift from the target | 3.6% |
| Against a 5 point band | Inside: no trade under this rule |
| Traded to restore the target | ₹80,000 |
| RupeeCase fee on that trade | ₹160 |
03Key concepts
What to know before you use it.
Calendar or band
Calendar rebalancing trades on fixed dates; band rebalancing trades when weights move far enough. Many systematic strategies combine both.
Absolute or relative bands
This calculator uses an absolute band in percentage points. A relative band (for example 25% of the target) widens with the target weight.
Good to know
- Narrow bands trade more often; wide bands let risk drift further.
- The rebalance cost calculator puts a yearly number on a cadence.
04Assumptions
What the calculator assumes.
- One holding against the rest of the portfolio; no cash flows.
- RupeeCase fee of 0.2% of traded value; taxes on gains not included.
05Questions
Asked about the Drift and rebalance band.
When should a portfolio be rebalanced?
Rules differ: on fixed dates, when a weight leaves a band, or both. The rule matters less than following it consistently.
What is portfolio drift?
The gap between a holding’s current weight and its target, caused by different returns since the last rebalance.
Community
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06Keep going
Learn the idea, see it applied.
More rebalancing and allocation calculators
Education only, not investment advice. RupeeCase is a technology platform operated by QC Alpha Technologies Pvt Ltd; it is not a fund, a PMS or a SEBI registered investment adviser. Model returns are back tested and not a promise of future returns. Figures carry the date they were checked.