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Finance
X-Ray Analysis
A portfolio analysis technique that looks through fund-of-funds or ETF holdings to reveal the true underlying security exposures — identifying overlaps, concentrations, and hidden risks not visible at the fund level.
X-ray analysis is especially important for investors in multi-asset strategies, target-date funds, or fund-of-funds, where the investor sees only the top-level vehicle but the actual exposure lives several layers down. Without looking through to underlying holdings, it's impossible to accurately assess sector concentration, geographic concentration, factor exposure, or individual security concentration.
For institutional investors managing large portfolios across multiple managers, X-ray analysis is a standard risk management tool. Each manager's portfolio is aggregated at the underlying security level to reveal the total portfolio's true exposures — ensuring that the intended diversification across managers is actually being achieved rather than recreated as multiple managers independently arrive at similar positions.