ClearAnalyserETF overlap and concentration in your DEGIRO portfolio: your true exposure per company
The Herfindahl-Hirschman Index (HHI) measures how concentrated your portfolio is in a handful of large positions, but doesn't separately count a company you hold through several ETFs — a look-through analysis of your ETF holdings calculates your true total exposure per underlying company, often higher than your individual positions would suggest.
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Ten positions isn’t the same as ten times the diversification
A portfolio with ten different ETFs looks diversified. In portfolios our customers upload, we regularly see ten to fifteen ETFs where a look-through shows Apple, Microsoft and Nvidia together accounting for 20-25% of the total — without any single position exceeding 4%. If five of those ETFs all lean heavily on the same large US tech companies, for example a combination of an MSCI World tracker, an S&P 500 ETF and a Nasdaq-100 ETF, you’re actually far more concentrated than the number of positions suggests. To see that, you need to look past the positions themselves — at what’s inside them. Ten positions. Not ten times the diversification.
The Herfindahl-Hirschman Index: concentration in one number
The Herfindahl-Hirschman Index (HHI) is a standard economics measure of concentration, applied to your portfolio: you sum the square of each position’s weight. A few dominant positions push the HHI up sharply, because squaring makes large weights count disproportionately more than small ones.
- Low HHI — your wealth is spread broadly across many positions of similar size.
- High HHI — a small number of positions determine most of your portfolio value, with all the risk that entails if something goes wrong there.
Buying ten ETFs “for diversification” is, in practice, often an expensive form of reassurance: you pay ongoing costs ten times over for exposure that’s just as concentrated as three positions.
What counts as a good HHI value?
A handy rule of thumb is the effective number of positions: 1 divided by the HHI. An HHI of 0.10 corresponds to an effective number of positions of 10 — your portfolio behaves, in terms of concentration, as if it consisted of ten equal positions. If that HHI climbs to 0.25, for example because three ETFs are all heavily weighted toward the same big tech names, a ten-position portfolio effectively behaves like just four.
The problem: the same stock through multiple ETFs
Concentration at the position level is only half the story. A global ETF, an S&P 500 tracker and a standalone tech stock can all overlap significantly: the same company simply appears in your portfolio three times, hidden behind three different tickers. Only a look-through analysis — one that looks past each ETF into its underlying holdings — reveals your true exposure per company. Five ETFs, all loaded with Apple and Microsoft — is that still diversification, or mostly repetition? This kind of hidden concentration is closely related to what we discuss under portfolio risk and diversification — and a portfolio that in reality leans on a handful of companies also runs a bigger risk of an unusually deep maximum drawdown.
A treemap makes concentration visible at a glance
An interactive treemap renders each position (or, after look-through, each underlying company) as a block whose area corresponds to its weight in your portfolio. This kind of visualisation makes it clear in seconds whether your wealth is reasonably spread out, or whether a handful of blocks take up most of the space. If it turns out a few companies dominate, portfolio rebalancing toward a target allocation is the usual way to spread that out again.
How ClearAnalyser calculates this for you
ClearAnalyser calculates your portfolio’s HHI live, visualises your holdings in an interactive treemap, and looks straight through all your ETFs in a “Company Exposure” table to show your true total exposure per underlying company. Which other tools look inside your ETFs is shown in the DEGIRO portfolio tracker comparison.