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Definition: Percent Variance

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Percent Variance is the sum of the absolute value of the difference between the target asset allocation and the actual (current) asset allocation.

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Calculation

Percent Variance = | Category Actual Weight - Target Weight |

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Example

Equity Deviation

Actual: 67%

Target: 60%

Equity deviation: | 67% - 60% | = 7%

Fixed Income Deviation

Actual: 29%

Target: 40%

Fixed Income deviation: | 29% - 40% | = 11%

Total Deviation

Deviated 4% under overall target

Total Percent Variance: 7% + 11%= 18% deviated

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