Portfolio concentration: Checking Concentration in the Largest Holdings
Top-N concentration adds the largest selected holdings and compares them with the portfolio total. It helps identify whether a small group dominates the account.
Use the Portfolio concentration Calculator to enter your own figures and compare the result with the worked example below.
Portfolio concentration formula
Top-N concentration = Top N holdings value ÷ Total portfolio value
Worked example
| Item | Example value |
|---|---|
| Holding values | 5000,3000,2000 |
| Number of largest holdings | 2 holdings |
| Portfolio concentration | 80% |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Holdings in different funds may overlap economically. A low direct concentration number does not prove broad diversification.
Related calculations
Method and further reading
The example follows the FinMathly calculator method. For broader background, see Investor.gov: Introduction to investing. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
Featured photograph: Pexels.