Equity Portfolio Analysis
Capital Markets Financial Model (Free Excel Download)
Plan equity portfolio allocation with position returns, sector exposure, concentration risk, rebalancing scenarios, and performance attribution for investment decisions.
professionals from Deloitte
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About this model
An equity portfolio analysis model tracks a 10-stock portfolio over a five-year period, computing total return accounting for dividends, rebalancing, and capital gains tax on realized trading events. The model begins with each position's entry price, dividend yield, expected annual return, and allocation percentage. Each year, the portfolio is rebalanced back to target allocations by selling positions that have outperformed (and realizing gains) and buying positions that have underperformed. Capital gains tax is applied only on the realized gain from the shares sold - not on paper gains that remain unrealized - capturing the tax efficiency of buy-and-hold versus active rebalancing.
The workbook computes both the internal rate of return (IRR), which accounts for the timing of dividend inflows and outflows, and the annualized return (CAGR), which is simpler but ignores timing. Management fees (typically 0.5% annually) and transaction costs (10 basis points per dollar of shares traded) are deducted from returns. The Sharpe ratio (excess return per unit of volatility) allows comparison to the S&P 500 benchmark, showing whether the portfolio's active returns justify its risk and costs.
This model is suitable for individual investors, wealth advisors, and asset owners evaluating active versus passive management, or assessing the tax efficiency of concentrated portfolios.
What every model includes
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
What's inside the Equity Portfolio Analysis
- Position-level holdings: symbol, shares, cost basis, current value, unrealized gain/loss
- Portfolio weights and sector allocation breakdown
- Performance attribution: price returns, dividends, contributions, and withdrawals
- Concentration risk metrics and diversification analysis
- Rebalancing simulation and tax-loss harvesting opportunities
- Historical return and volatility tracking
Equity Portfolio Model: How the 5-Year Performance Template Works
This equity portfolio model projects a 10-stock US equity portfolio over five years, comparing risk-adjusted returns to a benchmark. It accounts for dividends, annual rebalancing, management fees, and capital gains tax on realised events, offering a structured way to evaluate portfolio performance and cost drag.
This article explains the template's documented specification.
Operating Drivers Behind Portfolio Performance
The model's performance hinges on two return sources: capital appreciation and dividend income. Each position's price grows annually at its expected return, while dividends per share increase at a specified growth rate.
- Shares held determine both market value and dividend receipts, with share counts reset each year during rebalancing. Management fees, transaction costs, and capital gains tax act as drags.
- The benchmark, a simple S&P 500 total-return proxy, provides a passive comparison. This structure isolates active decisions—allocation and rebalancing—from market movements.
Annual Calculation Flow and Rebalancing Mechanics
The model operates on annual steps from 2025 to 2029. Each year, prices are projected, then shares are adjusted to target allocations using the prior year's total portfolio market value.
- This rebalancing triggers realised gains or losses on shares sold, with capital gains tax applied only to positive realisations. Transaction costs are computed on the absolute share change, ensuring no double-counting.
- Dividends are calculated from post-rebalance shares. The process repeats for each position, and totals aggregate across the portfolio.
This flow captures the compounding effects of rebalancing and cost drag.
Output Metrics and Their Interpretation
The model produces several key outputs: IRR, annualised return, benchmark return, excess return, and Sharpe ratio. IRR and annualised return both use the same terminal net market value, which deducts terminal capital gains tax and transaction costs.
- Annualised return is a money-weighted CAGR, while IRR accounts for interim cash flows. Sharpe ratio uses the portfolio's volatility input.
- These metrics help assess whether the active strategy, after costs and taxes, outperforms the benchmark on a risk-adjusted basis. All outputs are driven by the documented assumptions.
Practical Applications and Limitations
This template suits investors evaluating a concentrated equity portfolio's after-tax performance over a medium-term horizon. It highlights the impact of rebalancing frequency, cost structures, and tax drag.
- The model is closed-end, with no additional contributions, and assumes long-only positions. It does not cover leverage, short selling, or intra-year trading.
- Users can adjust assumptions like allocation, expected returns, and tax rates to reflect their own views. However, the public download is a values-only preview, not a live formula workbook, so it demonstrates the model's logic rather than enabling immediate recalculation.
Formatted to IB standards
Named theme colors repaint the whole workbook in one click, on top of an investment-banking structure with clear input, output, and cross-sheet reference styling - brand-ready, institutional-grade, and fully auditable.
Created by ex-finance professionals
Hey, I’m Alex and I created Finamodel.
Over my years in the finance industry I kept building the same models over and over again. Same structure, same assumptions, different logo. So I started building frameworks to turn them into clean, reusable templates.
Every model here is one I’d actually use for a client, and I personally vet each one before it goes up.
I’m not an expert in every industry, but I’ve built enough models to know what belongs in one. And when something is completely foreign to me, I reach out to my network for experts to work on our models with us.
Having a template library on hand cuts a first build from hours to minutes.
Need help finding your model? You’ll find me in the Finamodel app!
Frequently asked
What is an equity portfolio model?+
A model that tracks equity holdings, calculates portfolio-level performance and risk metrics, and supports rebalancing and reporting decisions.
What is allocation drift?+
Changes in position weights due to market movements that push the portfolio away from target allocation and increase unintended risk.
How is performance attribution calculated?+
Attribution isolates returns from price changes, dividends, and portfolio flows using methods such as Brinson-Fachler allocator versus selector decomposition.
When should I rebalance a portfolio?+
Rebalance quarterly or annually, or when allocations drift more than 5% from target, balancing diversification benefits against transaction costs and taxes.
Who uses equity portfolio models?+
Portfolio managers, wealth advisors, institutional investors, and family offices use them for reporting, risk monitoring, and trading decisions.
Have more financial modelling questions? Contact us
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