Glossary · Financial Portfolio

What is asset allocation?

Asset allocation is the way a portfolio is divided among asset categories, such as cash, shares, property and fixed interest. It describes the mix, not just the total value.

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Plain English. Australian context.

Asset allocation

Know what the term means, what it does not mean and where to go next.

Meaning & context

What it means for your records.

Plain-English information to help you organise your financial picture.

Financial Portfolio editorial team
Australian record-keeping context
Updated 7 October 2026

A simple example

An illustrative A$100,000 investment portfolio with A$50,000 in shares, A$30,000 in fixed interest and A$20,000 in cash has a 50%, 30%, 20% allocation. This is an arithmetic example, not a recommended mix.

What to keep in your records

Use the same valuation date and portfolio scope for each category. Decide whether a fund is shown as one holding or broken into underlying assets; avoid counting both.

A common mix-up

Allocation and diversification are related but different. A category percentage alone does not show concentration in a particular company, industry or country. Read ASIC Moneysmart’s explanation.

Can asset allocation change without buying or selling?

Yes. If the values of existing holdings change at different rates, their percentages of the total can change too.

Where can I check the meaning of asset allocation?

Use the ASIC Moneysmart source alongside the relevant statement or product documents. The examples here explain the term; they do not recommend a financial product.

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