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overweight

overweight – when a portfolio holds more of an asset than in the index

Overweight is used as a relative term, generally to something neutral, generally an index and in the context of a benchmark.

The opposite is underweight

See also neutral weight

Example

Stock A is 10% of an index.  A portfolio holds 12% of Stock A.  The portfolio is overweight Stock A by 2%

Germany is 10% of the European Index. Investment manager likes Germany. Portfolio holds 12% and is 2% overweight

Outcome

If stock A’s share price rises, the portfolio performs well relative to the index because it holds 2% more than the index

If German markets fall, the portfolio performs badly relative to the index because it holds 2% more than the index

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