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2. See: Underperform.
When you own less of a security, an asset class, or a subclass than your target asset allocation calls for, you are said to be underweighted in that security, asset class, or subclass.
For example, if you have decided to invest 30% of your portfolio in fixed-income investments, but the actual holdings account for only 10% of your portfolio, you are underweighted in fixed income.
In another use of the term, a securities analyst might recommend underweighting a particular security, which you might reasonably interpret as advice to sell.