Reviewing your share portfolio outside a PEA: a 6-point method
Diversification is often thought of through the PEA, the French equity savings account. But many investors also hold shares in an ordinary securities account (in France, a "compte-titres ordinaire"), directly or through ETFs, with US and international stocks and different currencies. Reviewing such a portfolio rests on the same principles, with currency and geographic region added, which the PEA's European limitation hides. Here is a 6-point method, usable with a simple spreadsheet or a tracking tool.
1. Concentration: the weight of each position
Calculate the weight of each position in the portfolio (value of the line ÷ total value) and look at the biggest ones. There is no universal cap: each investor sets their own reference points according to their horizon and risk tolerance.
Fictitious example. A €20,000 portfolio has 8 holdings. The largest is worth €6,000, that is 30% of the total. A 50% fall on that one holding would reduce the portfolio by 15%.
For the logic behind such caps, see how to diversify a stock portfolio and how many holdings make a well-diversified portfolio.
2. Sectors: the split by activity
Group the holdings by sector of activity. A portfolio of 10 holdings all in technology remains strongly concentrated on a single cycle. See the classification of the 11 sectors.
3. Geographic regions
Outside a PEA, nothing requires you to stay in Europe (the eligibility rules of account types are not covered here): look at the share of the United States, Europe and emerging countries. Beware of "world" ETFs, a large part of which can be American: read their composition rather than their name.
4. Currencies
A share quoted in dollars exposes you to currency, regardless of the region of activity. Add up the share of the portfolio quoted in each currency, then add the indirect exposure of ETFs. See currency risk.
5. Market sensitivity and risk
The portfolio's weighted average beta indicates roughly whether it amplifies or dampens market moves, and volatility and drawdown describe the size of past fluctuations. See a stock's beta, volatility and drawdown and the Sharpe ratio.
6. Costs and overlap
- Costs: brokerage, custody fees, currency fees, ongoing charges of ETFs. See the impact of brokerage fees.
- Overlap: a world ETF and a US ETF partly contain the same companies; you can hold the same company several times without seeing it.
Summary: a simple table to keep
| Point | Question to ask |
|---|---|
| Concentration | Which is the largest holding, and what weight does it have? |
| Sectors | Does one sector dominate? |
| Regions | What share is in each region, including via ETFs? |
| Currencies | What share of the portfolio is quoted outside the euro? |
| Risk | Does the portfolio amplify or dampen the market? |
| Costs | What is the total annual cost? |
A review is not a verdict: it describes the composition of the portfolio at a given moment. The decisions that follow depend on the horizon, risk tolerance and situation of each person.
For a first quantified reference point without creating an account, you can calculate your portfolio's diversification score for free.
Key takeaways
- 6 points: concentration, sectors, regions, currencies, risk, costs and overlap.
- Outside a PEA, currency and region become dimensions in their own right.
- ETFs can hide exposures: read their composition.
- The review describes, it does not advise.
This article is for information and education only and does not constitute personalised investment advice. The figures in the examples are fictitious and illustrative.