How the allocation look-through works

The allocation screens show what you really own. A single target-date or total-world fund can hold US stocks, foreign stocks and bonds at once. The look-through splits each holding into its parts.

The classes

Holdings are split into eight classes:

• US stocks
• International developed stocks
• Emerging-market stocks
• US bonds
• International bonds
• Cash
• Real estate
• Other

How each holding is classified

The first rule that applies wins:

1. A classification you set on that holding.
2. Your earlier answer for the same ticker. The app remembers it.
3. The app's fund file, for common funds.
4. Cash and money-market positions count as cash.
5. Individual stocks count as US stocks.
6. Anything else is unclassified. It's listed for you to classify, and left out of the shares rather than guessed.

The fund file

The fund file covers common index and target-date funds. Each entry records how it was classified:

• Published: the fund provider's own published breakdown by region and asset type.
• Index mandate: a fund that tracks a single-region index counts fully in that class.
• Fund of funds: a target-date or similar fund is looked through to its underlying funds by weight. Underlying funds the file doesn't cover count as "other."

Breakdowns change as markets move and funds rebalance, so treat the shares as close estimates.

Projections keep their own classes

Projections use the asset classes in your plan's market assumptions, such as US stocks, international stocks and bonds. The finer classes map onto them by name. Holdings change an account's projection mix only when you choose Use as projection mix, which you can undo.

Targets

A target is a set of sleeves that add up to 100%. A sleeve is either a group of asset classes or a list of tickers. A holding whose ticker is in a ticker sleeve counts there in full. Every other holding is split across the class sleeves by its look-through mix.

A target can cover all accounts, only taxable accounts, only tax-advantaged accounts, or accounts you choose. Accounts without holdings are listed, not counted.

Bands

Each target can use:

• an absolute band, in percentage points either side of the target,
• a relative band, as a share of the target, or
• the smaller of the two.

The default is the smaller of 5 points and 25% of the target.

Rebalancing moves

The moves bring every sleeve to its target, in this order:

1. New money buys sleeves that are below target, in proportion to the gap. A withdrawal sells sleeves above target the same way.
2. Exchanges inside tax-advantaged accounts, largest first. These create no taxable gain.
3. Sales in taxable accounts, lowest gain per dollar first, buying in the same account.

Gains use each holding's cost basis when it's known, or the account's basis otherwise. The moves are information only, not investment or tax advice.