Concentration: top-10 weight, HHI and effective holdings

Three ways to measure how top-heavy a portfolio is, and what different levels look like.

Two portfolios can both hold 60 stocks while being utterly different animals: one an equal-weight spread, the other a two-stock bet with 58 leftovers. Position counts can't tell them apart; concentration measures can.

Top-N weight

The simplest: what share of reported equity value sits in the largest 1, 5, 10, 20 positions. Top-10 weight is the workhorse — intuitive and robust. Among tracked managers you will see everything from under 10% (broad quants and index funds) to over 90% (single-idea vehicles).

HHI and effective holdings

The Herfindahl–Hirschman index is the sum of squared portfolio weights (as fractions). Its inverse, 1/HHI, is the effective number of holdings: the count of equal-weight positions that would produce the same concentration. A book of 100 names with an effective count of 11 behaves like an 11-stock portfolio. This site shows both on every manager page; the formulas are exactly these, documented on the concentration methodology page.

Reading levels

Rather than labeling managers "good" or "bad," concentration sets the exchange rate for every other signal. In a concentrated book, a new 3% position is a decision the principals argued about; in a 2,000-name book, it may be a factor model's output. The site's high-conviction screens therefore require both a weight threshold and context about the manager's concentration, and stock pages show how concentrated each holder's overall book is before you read meaning into their stake.