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Allocation Vs Position Size

|Includes: iShares MSCI Thailand Capped ETF (THD)


This is no article by any means. I am simply trying to ask a question and gain feedback from the great experienced members here. In a portfolio of stocks (not indexes / not funds) I have studied allocation by sector and so forth. What I do not really understand is how position sizes evolve other than if I were to, say, define my position size as 2% in a portfolio and buy 50 positions so they would all be relatively even in market value, in the beginning. And then over time of course some will perform better than others creating position size gaps and then I might balance (rebalance) from time to time. However, I have looked at some funds and portfolios which have uneven position sizes (varying way more than 50-100% on many of them) and I wonder if there is a train of thought about that.

(just an example I looked at the fund THD which holds 91 positions all different percentages and some sub 1%)

And then I have seen what looks to my like arbitrary sector sizing (26% Energy, 35% Finance, 21% Consumer Goods, etc...) and wonder if there is an implied logic when deciding how much weight to put in a sector.

Now to protect you from rambling I will cut this off. I would appreciate any and all experienced commentators in this area, thank you in advance!