What is portfolio drift?

Quick definition

Portfolio drift is the gap between your target allocation and your actual allocation after market moves. Left unchecked, drift can increase risk and change how your portfolio behaves in downturns.

Questions investors ask

Why does portfolio drift matter?

Drift changes risk exposure without an explicit decision. A portfolio designed as moderate risk can become equity-heavy during a bull market and draw down harder than expected.

How often should I check for drift?

Many investors review monthly or quarterly, and after large market moves. The right cadence depends on portfolio complexity and your tolerance for allocation changes.

Do I need to rebalance every time drift appears?

Not always. Many investors use tolerance bands and rebalance only when drift exceeds predefined thresholds, balancing risk control and transaction costs.

Next step

Use the ETF Overlap Checker, run a free risk snapshot, and review the metrics methodology to connect definitions with your own portfolio.