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Example Product Portfolio Gap Analysis Template
1
Gary P. Brinson, L. Randolph Hood, and Gilbert L. Beebower. “Determinants Of Portfolio Performance.” Financial Analysts
Journal 42.4 (1986): 39-44. Print.
Portfolio Gap Analysis
Asset Allocation
Potential Gap
Asset Allocation
One of the most important steps in efficient portfolio construction is setting the proper asset
allocation.
In a study conducted by academics Gary P. Brinson, L. Randolph Hood, and Gilbert L. Beebower,
asset allocation was found to account for 93.6%
1
of the variation in portfolio return.
Asset allocation establishes what portion of your portfolio will be exposed to the volatility of the
equity markets. The proper allocation must be determined with care and in context with your
investment goals and your personal risk tolerance.
Current Portfolio
20%
80%
Recommended Portfolio
2%
33%
65%
Current Recommended Gap
Cash 0% 2% -2%
Fixed Income 20% 33% -13%
Equity 80% 65% 15%
Other 0% 0% 0%
Figures may not add up to 100% due to rounding.
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