Setting Allocation Targets
Allocation targets define the ideal distribution of your portfolio across different assets or categories. For example, you might target 60% stocks, 30% bonds, and 10% cash. Setting these targets in 1ndexed enables the platform to track how far your actual allocation has drifted from your plan.
To configure targets, go to the Allocation page and add your desired allocations. Each allocation consists of a label, target percentage, and the assets assigned to it. The total of all targets must equal 100%.
You can set up allocation in two ways: simple asset-level targets (where each position has its own target percentage) or category-based targets (where you group assets into categories like "US Stocks" or "European Bonds" and assign targets to categories). Category-based allocation is useful for portfolios with many positions that fall into logical groups.
Once targets are set, the Allocation page shows a clear comparison between your current and target weights, highlighting positions that are overweight or underweight relative to your plan.
The 5/25 Rebalancing Rule
Rebalancing means buying or selling assets to bring your portfolio back to its target allocation. But rebalancing too often wastes money on transaction costs, while rebalancing too rarely lets your portfolio drift far from your plan. The 5/25 rule provides a disciplined middle ground.
The rule works like this: for large positions (those with target allocations of 20% or more), rebalance when the position has drifted by 5 percentage points or more from its target. For small positions (those with targets below 20%), rebalance when the position has drifted by 25% relative to its target.
For example, if a position has a 40% target, a 5 percentage point absolute drift means rebalancing at 45% or 35%. If a position has a 10% target, a 25% relative drift means rebalancing at 12.5% or 7.5%.
1ndexed applies this rule automatically and highlights positions that have exceeded their rebalancing threshold. When rebalancing is needed, the platform shows the recommended trades (buy or sell amounts) to bring your portfolio back to target. This takes the guesswork out of when and how much to rebalance.
Contribution Simulator
The contribution simulator lets you plan your next investment by showing how a hypothetical contribution would affect your allocation. Instead of manually calculating which positions to buy, you enter the amount you plan to invest and 1ndexed calculates the optimal distribution.
The simulator takes your current holdings, your target allocation, and your planned contribution as inputs. It then shows how many shares of each asset you would need to buy (or sell) to get as close to your targets as possible after the new investment.
This is especially useful for investors who make regular monthly or quarterly contributions. Rather than simply buying more of the same fund each month, the simulator helps you direct each contribution toward the most underweight positions, keeping your portfolio naturally balanced without needing to sell existing holdings.
Excluding Unallocated Positions
Not every position in your portfolio needs to be part of your allocation plan. You may hold some assets for reasons unrelated to your main investment strategy — for example, employer stock options, legacy holdings you plan to sell, or speculative cryptocurrency positions.
The "Exclude Unallocated" feature allows you to remove positions that do not have an allocation target from the weight calculations. When enabled, the allocation percentages are calculated using only the positions that have assigned targets, giving you a clearer picture of how your planned portfolio is balanced.
For example, if your portfolio is worth 10,000 EUR but 2,000 EUR is in unallocated positions, enabling this feature means allocation percentages are calculated against the 8,000 EUR in allocated positions rather than the full 10,000 EUR. This prevents unallocated holdings from distorting your allocation view.