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
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
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