Portfolio Weight

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Capital Markets

    Markets for buying and selling equity and debt instruments. . ...
  2. Inefficient Portfolio

    An inefficient portfolio is an investment portfolio that delivers ...
  3. Asset Allocation

    An investment strategy that aims to balance risk and reward by ...
  4. Asset Management

    1. The management of a client's investments by a financial services ...
  5. Investing

    The act of committing money or capital to an endeavor (a business, ...
  6. Investment

    An asset or item that is purchased with the hope that it will ...
Related Articles
  1. Personal Finance

    Rebalance Your Portfolio To Stay On Track

    Like a tune-up for a car, this re-alignment should minimize trouble down the road.
  2. Options & Futures

    6 Asset Allocation Strategies That Work

    Your portfolio's asset mix is a key factor in whether it's profitable. Find out how to get this delicate balance right.
  3. Retirement

    The 6 Most Common Portfolio Protection Strategies

    It's impossible to avoid all risk, but these strategies can help protect you against the worst of it.
  4. Fundamental Analysis

    Is Your Portfolio Overweight?

    As time passes, in order to remain profitable, investors need to put certain parts of their portfolio on a diet.
  5. Technical Indicators

    What are the best technical indicators to complement the Negative Volume Index (NVI)?

    Explore other technical indicators that can be used when designing a trading strategy that incorporates the negative volume index.
  6. Economics

    Profiting From China's Breakout: The Right Funds

    China's prospects for growth, and for rewarding investments, can't be debated. Here are some worthwhile funds to invest in, and the smart way of doing it.
  7. Trading Strategies

    How do I build a profitable strategy when spotting a Golden Cross pattern?

    Learn the primary trading strategies that traders and market analysts employ when they have identified the occurrence of the golden cross pattern.
  8. Technical Indicators

    How are Golden Cross patterns interpreted by analysts and traders?

    Learn why the golden cross is considered a major technical indicator of a bull market in an individual stock, market index, or other trading market.
  9. Charts & Patterns

    What is a common strategy traders implement when using the Elder-Ray Index?

    Read about the important buying and selling conditions that are recommended by Dr. Alexander Elder when using his Elder-Ray index.
  10. What's a Multinational Corporation?
    Investing

    What's a Multinational Corporation?

    A multinational corporation is just that – a corporation that operates in multiple nations, with a home office that coordinates global management. Being a multinational corporation is a complicated ...

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center