Portfolio Weight

DEFINITION of 'Portfolio Weight'

The percentage composition of a particular holding in a portfolio. Portfolio weights can be simply calculated using different approaches: the most basic type of weight is determined by dividing the dollar value of a security by the total dollar value of the portfolio. Another approach would be to divide the number of units of a given security by the total number of shares held in the portfolio.

BREAKING DOWN 'Portfolio Weight'

Portfolio weights are not necessarily applied only to specific securities; investors can calculate the weight of their portfolios in terms of sector, geographical region, index exposure, short & long positions, type of security (such as bonds or small cap technology companies) or any other type of benchmark. Essentially, portfolio weights are determined based on the particular investment strategy.

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