Measuring Portfolio Concentration: The Metrics That Actually Matter in 13F Analysis

Why Concentration Matters Portfolio concentration is one of the most predictive signals in institutional holdings data. It tells you: How much a manager trusts their top ideas Whether they're diversifying or concentrating over time How different they are from a passive index Key Metrics def concentration_metrics ( holdings ): total = sum ( h [ ' value ' ] for h in holdings ) sorted_holdings = sorted ( holdings , key = lambda x : x [ ' value ' ], reverse = True ) return { ' top1_weight ' : sorted_holdings [ 0 ][ ' value ' ] / total , ' top5_weight ' : sum ( h [ ' value ' ] for h in sorted_holdings [: 5 ]) / total , ' top10_weight ' : sum ( h [ ' value ' ] for h in sorted_holdings [: 10 ]) / total , ' position_count ' : len ( holdings ), ' herfindahl_index ' : sum (( h [ ' value ' ] / total ) ** 2 for h in holdings ) } Real Examples from Q4 2025 Fund Top-1 Weight Total Positions Strategy Berkshire Hathaway ~49% (AAPL) ~45 High conviction, long hold Pershing Square ~20% 7 Activist, high c