Equilon FXThe allocation
you did not choose.
Change the starting mix and asset returns. Watch the weights drift, even with no new transactions.
EquitiesBonds
Returning to the initial mix would move 4.80 units from equities to bonds.
The arithmetic
Each starting holding is multiplied by one plus its return. Divide the resulting equity value by the new total to get its weight. A portfolio can therefore drift without the investor making an allocation decision.
What the adjustment means
The example keeps the final portfolio value constant and calculates the transfer required to restore the initial weights. It assumes two assets, no new money, no withdrawals, no costs, no tax and no currency conversion.
Real mandates differ. A portfolio may rebalance on a schedule, at a threshold or not at all. This calculator illustrates the mechanism, not a recommended allocation or a prediction of FX flows. Read Investor.gov’s explanation of rebalancing ↗.