Identifier: C5T2L1 · Revision: 2026-10-26 · Classification: domestic

Decision and objectives

The practical task is to aggregate direct and look-through fund exposures. Make the decision reproducible: name the exposure, time horizon, cash requirement and comparison baseline before selecting a product.

Objectives: Aggregate direct and look-through fund exposures; Identify overlapping issuer, currency and counterparty risks; Prevent double counting a wrapper and its assets.

Prerequisite: C5T1L5; completed Classes 1–4 and the Stock Market School foundation or Forex School foundation. Every example is hypothetical. Prices, dates, rates, fees, contract factors, policies and tax schedules are supplied teaching inputs, not current offers or legal parameters. No live account is needed.

Mechanics

A portfolio has a legal holdings view and an economic exposure view. The first records fund units, securities, cash and derivatives you own or owe. The second looks through each wrapper to the drivers you intend to measure. A fund unit and its underlying shares cannot both be added as separate asset wealth, but the underlying shares must be included when measuring issuer concentration.

Use dated holdings with cash and derivatives included. Report unknown or lagged holdings as uncertainty rather than allocate them to a convenient diversified bucket. A Turkish-lira-priced fund can hold foreign assets, so quotation currency alone does not settle economic currency exposure.

Price and return drivers

Look-through issuer amount = direct issuer holding + sum(fund investment value × issuer fraction). Divide by total portfolio value for concentration. For derivatives, measure the appropriate sensitivity or notional separately; a premium-paid option asset value is not its equity-equivalent exposure. Do not add currency and equity exposures as if they were mutually exclusive asset buckets: one asset can carry both.

Worked case

Hypothetical portfolio TRY 1,000,000: direct issuer A TRY 200,000; fund X TRY 400,000 with 30% issuer A and 25% foreign-currency assets; fund Y TRY 300,000 with 20% issuer A and 60% foreign-currency assets; TRY cash 100,000. Issuer A exposure = 200,000 + 120,000 + 60,000 = TRY 380,000, or 38%. Foreign-currency asset exposure = 400,000 × 25% + 300,000 × 60% = TRY 280,000, or 28%, before any hedges. The legal holdings still total TRY 1,000,000; adding the fund underlying amounts again would overstate wealth.

Adverse case

If issuer A falls 40% and all other prices stay fixed, approximate portfolio loss is TRY 152,000, or 15.2%, rather than the TRY 80,000 direct-only loss. If a newer fund X report instead shows 45% issuer A, updated exposure becomes TRY 440,000 and the same shock loses TRY 176,000. A stale holdings date is therefore a material input, not a formatting issue. Fund cash, hedges and nonlinear derivatives can make a simple proportional estimate imperfect.

Practical use

Obtain the fund policy, dated holdings and any derivative disclosures through official fund documents and KAP records. Confirm valuation dates and portfolio weights sum consistently; a missing fund report prevents a precise live claim. Include wrapper expenses already in unit prices once, investor-level redemption or sale costs, tax and any hedge funding when comparing changes. Reallocation must also respect redemption and settlement dates.

Use permitted domestic access routes and the actual instrument documents. Verify intermediary authority, investor eligibility, order/redemption terms, settlement, custody and executable size before implementation. Reconcile spread and commissions, funding, collateral, custody, product expenses, conversion and exit charges; an amount already embedded in a fill or fund unit price is not deducted again. A published mark or product description does not promise an executable price or liquidity.

Tax is excluded unless a numerical schedule is expressly supplied as hypothetical. For actual rules record income year, residence and individual/corporate status, instrument and acquisition/contract dates, taxable event and rule effective date. The GIB investment-income guide, checked 2026-10-26, covers 2025 individual income; its 2026 publication date alone cannot settle a 2026 liability.

Decision boundaries

Look-through analysis suits concentration and common-driver decisions, while legal form remains essential for custody and creditor rights. Do not infer diversification merely from the number of fund names. Decline a precise risk claim if material look-through data are absent; use a conservative range or smaller exposure instead.

Practice and references

Exercise: hypothetical direct issuer B TRY 50,000 plus TRY 200,000 in a fund with 40% B and TRY 150,000 in a fund with 10% B; cash TRY 100,000. Solution: total portfolio TRY 500,000; B = 50,000 + 80,000 + 15,000 = TRY 145,000, or 29%. A 20% B-only fall costs approximately TRY 29,000 before costs and indirect effects.

Takeaway: Prevent double counting a wrapper and its assets with the cash dates, costs and remaining risks stated.

Product card: portfolio-decision-record. Formula: Look-through exposure. Glossary: Look-through exposure, Overlap. Next lesson: C5T2L2. Topic test.

Sources checked 2026-10-26:

Additional product cards: mutual-fund.

Shared reference guide