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Exposure and Holdings: Double the Jargon, Double the Fun!

November 22, 2016

  • Exposure is anytime you are financially exposed
  • Holdings are what financial instruments are held by you
1 min read

With words like exposure and holdings it sounds like this could quickly become NSFW. But don’t worry, we’ve got you covered.

Let’s jump right in and get exposed.

What does exposure mean in finance talk? Exposure is anytime you are financially exposed. Exposed to risk and exposed to potential reward. It’s pretty much what it sounds like.

But to get a bit more specific — exposure is when you use your capital to purchase an ownership interest and participate in the performance of an asset.

Let’s unpack that jargon heavy sentence. It will only take a moment.

By capital, we finance folks just mean money. (Cash, Moola, Cheddar, Sawbucks)

Ownership interest means anything you’ve got a right to, legally. (The stuff you can manage, sell, or donate.)

And an asset is something you own! (i.e. a stock, bond, or ETF)

FYI: Equity exposure is the percentage of a portfolio that is made up of equity, or shares!

Which brings us to holdings.

And not the kind that results in an automatic first down.

Holdings are what financial instruments are held by you — what’s in your investment portfolio.

Equity exposure is the percentage of a portfolio that is made up of equity, or shares!

This is easy to understand if we take an example from Stash.

If you invest in Blue Chips on Stash, you’ve seen this screen:

market exposure

This is a list of the Top Exposures held in your Blue Chips investment. This investment is made up of 156 holdings. (We list the top 10, but the full list is always available by visiting the fund website).

Apple represents the top holding in this fund at 3.65%. So if your Blue Chips investment is currently valued at $100, your exposure to Apple is $3.65!

So at Stash, exposure means how much of your money is invested in a particular company or industry within your chosen investments. And as you can see, this is expressed as a percentage of the total value of the ETF.

By Clare Edgerton
Clare is an editorial producer and writer for Stash.

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