This comprehensive guide analyzes how shifting forex valuations dictate the real returns of international asset allocations. Designed for institutional investors and high-net-worth individuals, we examine the mechanics of "currency drag," strategic hedging frameworks, and the tools required to protect purchasing power. By the end of this deep dive, you will understand how to transform foreign exchange risk from a portfolio leak into a calculated performance driver.
Rebalancing calculator
What do you need to buy or sell to bring a portfolio back to its target weights?
New to this?
See how it works
HoldingCurrent valueTarget %
TO TRADE TO REACH TARGET
$10,000
Buy $10,000 and sell $10,000 in total.
Target weights add up to 105%. They were scaled to 100% for this result.
Portfolio value $100,000Largest drift 8.0 pp
Assumptions & limits
What the calculator takes as given, what it leaves out, and where the rules it relies on come from.
Target weights are scaled to 100% if they do not sum to exactly 100.
“Buy and sell” shows gross turnover; “new money only” allocates cash without selling.
Taxes, trading costs and lot-level constraints are not modelled.
How it works
The logic behind the result, step by step, with the formula the calculator uses.
Current weights are each holding’s value divided by total portfolio value.
Drift is current weight minus target weight, in percentage points.
Ideal values apply scaled targets to total portfolio value (plus new money in that mode).
Turnover is half the sum of absolute trade amounts in buy-and-sell mode.
Worked example
One full calculation with the default inputs, so you can check each step against the calculator.
SCENARIO
Default four-asset portfolio ($100,000 total): $10,000 to trade — buy $8,000 US stocks, buy $2,000 international, sell $5,000 bonds, sell $5,000 cash; largest drift 8.0 pp on US stocks.
Questions and answers
Short answers to the questions readers ask most about this calculation.
If your targets add up to 105% or 95%, the calculator scales them proportionally so the maths stays consistent while warning you that the inputs did not sum to 100%.
In buy-and-sell mode it is the smaller of total buys and total sells — the amount that actually changes hands to reach targets.
No. Selling for rebalancing may trigger capital gains. This tool shows mechanical trades only.
Yes. Switch to “New money only” to allocate deposits across underweight holdings without selling.
Updated
Our methodology
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