Overweight and underweight
The terms overweight and underweight are used by brokers and fund managers to indicate their preference for stocks or markets relative to particular indices or benchmarks.
The terms overweight and underweight are used by brokers and fund managers to indicate their preference for stocks or markets relative to particular indices or benchmarks.
If, for example, a fund manage who uses the FTSE 100 as a benchmark says he is overweight BT, he means that he holds a greater percentage of BT shares in his portfolio than BT's weighting in the FTSE 100. If he is underweight he means the opposite.
Stock brokers often use the terms over and underweight to make their views on stocks clear. If they rate a stock overweight it suggests that they expect it to outperform the market. An underweight rating suggests they expect it to underperform the market.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
See Tim Bennett's video tutorial:What is an index?
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
-
8 of the best houses for sale for around £500,000
Some of the best houses for sale for around £500,000 – from a 19th-century stone farm cottage in North Yorkshire and a two-bedroom apartment in Edinburgh’s New Town to a converted Methodist chapel in Norfolk
-
What will the unravelling of US-China trade mean for the economy?
What will a US-China decoupling mean for the global economy?