Allowable range

An allowable range sets how far an asset class may move from its target before the policy is breached. Some US foundation policies use the term; others say policy range, permissible range, bandwidth, or lower and upper limit. A typical entry reads “equities 45% (range 35% to 55%)”.

The range is a hard limit on the class’s share of portfolio value. Within it, the manager may tilt; outside it, the policy usually requires rebalancing or committee approval. Some policies add an inner trigger, such as rebalancing once a class drifts 5 points from target.

In an asset allocation range rule, the range becomes a hard minimum and hard maximum per class. A narrower warning band can sit inside it. Example: bonds with a 20%–40% range and warning bounds at 22% and 38% return a warning at 39% and a breach at 41%.