Reported Asset Allocation
The actual current allocation of the portfolio at a specific point in time as reported in financial statements, board materials, or regulatory filings.
Reported allocation changes daily as market values fluctuate and drifts from targets as some assets outperform others. The gap between reported and target allocation drives rebalancing decisions and manager funding activity.
Example: A pension targeting 30% global equity may show 38% reported after a strong equity bull market — triggering a rebalancing sell decision to return toward target.
Frequently Asked Questions
What is reported asset allocation?
Reported asset allocation is the actual current allocation of a portfolio at a specific point in time, as shown in financial statements or regulatory filings — distinct from the target allocation set by policy.
Why does reported allocation differ from target allocation?
Market movements cause allocation drift. When equities outperform, their weight grows beyond target; when they underperform, their weight shrinks. This drift drives rebalancing decisions.
How often do institutions rebalance to target allocation?
Rebalancing frequency varies — some institutions rebalance quarterly, others use tolerance bands (e.g., rebalance when allocation drifts more than 3-5% from target) to balance transaction costs against drift risk.
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