underweight - when a portfolio holds more of an asset than in the index

Underweight is used as a relative term, generally to something neutral, generally an <a href="https://quoteddata.com/glossary/index/">index</a> and often refers to a <a href="https://quoteddata.com/glossary/benchmark/">benchmark</a>.

The opposite is <a href="https://quoteddata.com/glossary/overweight/">overweight</a>

See also <a href="https://quoteddata.com/?post_type=rf_glossary&amp;p=21270&amp;preview=true">neutral weight</a>
<h4>Example</h4>
Stock A is 10% of an index.  A portfolio holds 8% of Stock A.  The portfolio is underweight Stock A by 2%

Germany is 10% of the European Index. Investment manager is concerned about Germany. Portfolio holds 8% and is 2% underweight
<h4>Outcome</h4>
If stock A's share price rises, the portfolio performs badly relative to the index because it holds 2% less than the index

If German markets fall, the portfolio performs well relative to the index because it holds 2% less than the index