Portfolio Allocation Calculator

What this calculator tells you

The allocation of a portfolio describes how its value is split between holdings, such as shares, bonds, cash or property. This calculator shows the share each holding makes up of the total, so you can see at a glance how concentrated or diversified the portfolio is and whether it matches the mix you intend to hold.

Allocation is one of the main drivers of how a portfolio behaves over time. Two portfolios with the same total value can behave very differently if one is mostly shares and the other mostly cash, so knowing the split is an important first step in any review.

How the percentages are worked out

Each holding's value is divided by the total value of the portfolio and multiplied by 100. The percentages add up to 100 when the holdings cover the whole portfolio. The calculator uses the current value of each holding, not the amount you originally invested, so the allocation shifts as prices move.

A worked example

Suppose your portfolio holds 6,000 in shares, 3,000 in bonds and 1,000 in cash. The total is 10,000. The shares make up 60%, the bonds 30% and the cash 10%. If the shares rise to 7,000 while the others stay the same, the total becomes 11,000 and the shares become about 64%, even though you have not bought or sold anything.

Concentration and diversification

A large share in one holding, sector or country increases the risk that a single event will move the whole portfolio. Many investors set a maximum weight for any single holding, such as a few percent or a set share, and review the allocation when it drifts beyond that limit. Looking at the split by asset class, by sector and by country gives a fuller picture than one list of holdings alone.

Limits of the calculation

The calculator shows the current split only. It does not measure how the holdings are related to each other, which determines how much diversification you actually have. Two funds that hold the same companies, for example, may look like separate holdings but add little diversification. Liquidity, currency exposure and tax treatment are also not shown.

Turning the split into a plan

Once the current allocation is clear, compare it with a target written down in advance. Set a tolerance, such as a few percentage points, for each holding. When a holding moves outside that range, you have a clear reason to review it rather than reacting to news or short-term moves.

Using the result

Compare the current allocation with your target, and note how far each holding has drifted. Use the result to decide whether to add new money to the underweight parts of the portfolio or to rebalance, as the portfolio rebalancing calculator does. Review the allocation regularly, because a mix that suited you when you set it up may no longer match your goals.

Looking beyond the holding names

Two holdings with different names can have very similar exposures. Check each fund's largest holdings and its country and sector weights, and add up the exposure across the portfolio. A portfolio that looks spread across ten funds may have most of its money in the same few large companies. Looking at the combined exposure gives a more honest picture of diversification than the list of names.

Also check currency exposure, because holdings in other currencies carry a risk that the allocation percentages do not show.