Custom groups are one of Sharesight’s features that I find useful but most either don’t use it or use it minimally i.e. group holdings by industries.
For those unfamiliar with custom groups, it is a way to group your holdings into subgroups or buckets. While the benefits of grouping depend on the why and how you group them, a unifying advantage is that it is an easy way to reduce mental load. Instead of grouping holdings in your head, you outsource this task to Sharesight, which reduces cognitive strain and frees up your mental resources to do another kind of analysis.
Here are the 8 ways how you can group your holding.
Asset class
If you use any diversification strategies like Traditional 60/40, All-Weather portfolio (Ray Dalio), Future Fund Model, Global Multi-Asset strategy, etc, grouping your holdings by asset class (i.e domestic/international equities, crypto, fixed income, property, cash, etc) is an easy way to track how much money you have in each basket for both asset allocation and risk management purpose. You can work out what’s your allocation in each class (or category) when you run this in the Diversity report, and use that report for rebalancing.
How detailed should you group your investments is an individual preference. For example, a traditional 60/40 only needs two categories: stocks and bonds. Or you can further break it down into stocks > domestic & international, bonds > government or corporate, etc.
Time horizons
I don’t see people use it this way but this could be very useful to avoid ‘thesis drift’. You might invest in shares for many different reasons, some are more opportunistic (price or corporate action arbitrage), while others might be mid-term or long-term. This is useful for making buy/sell decisions and avoiding the influence of market price i.e holding opportunistic investments for far too long and vice versa, selling quality investments for a quick profit.
For example, I used to own a stock mainly for an opportunistic reason (low P/E, growing revenue) but never for a long-term investment (commoditised business, poor ROE). But as the share price went up, I decided to hold it (under the influence of market price aka thesis drift) instead of selling after hitting its ‘fair value’. That was a costly mistake.
Thematic
Useful for investors who focused on megatrends and future growths. Thematic investing like AI, lithium, cybersecurity, clean energy, etc became hugely popular during & after COVID-19 when more ETFs made it easier to invest in them. If you own more than one ETF for each theme, grouping them is an easy way to track how each theme drives total return performance (Contribution analysis report), their risk correlation (Drawdown risk report), and look out for overconcentration (Exposure report).
Market capitalisation
For investors with concentrated risk exposure, grouping holdings by market capitalization—such as large-cap, mid-cap, small-cap, and micro-cap—creates a structured framework to balance risk and return potential. Mega-cap and large-cap stocks typically offer stability (though not always) and lower volatility, while small-cap and micro-cap stocks present higher growth potential alongside greater risk. Tools like ROMAD (Return Over Maximum Drawdown) in our risk report can help quantify and compare the risk-reward profile of each market-cap tier, enabling more informed portfolio decisions.
Factor
Grouping investments by factors—like growth, value, dividend, or momentum—sharpens your strategy and reduces thesis drift. Each category demands distinct expectations: growth stocks tolerate higher volatility, value stocks require longer time horizons and momentum trades thrive on shorter cycles. Recognizing these nuances during market turmoil helps you avoid reactive mistakes—like selling a long-term value play during a dip or overholding a fading momentum trade.
Income
For dividend investors, you might diversify income streams across REITs, fixed-income (government/corporate bonds), and high-yield stocks. By grouping these holdings, you gain clarity on how each category impacts your portfolio—balancing cash flow timing, diversification, inflation hedging, and reinvestment potential. This structured approach ensures your passive income remains stable and adaptable to market shifts.
Financial goals
Grouping investments by financial goals—like retirement, education, or a home deposit—helps align your portfolio with real-life milestones. By matching assets to timelines (e.g., stocks for long-term growth, cash for short-term needs), you can track progress and adjust strategy if returns fall short. This keeps your money purposeful and avoids emotional decisions.
Valuation
Grouping investments by valuation metrics—like P/E ratio (price vs. earnings), ROE (profit efficiency), SMA200 (long-term trend), and RSI (overbought/oversold signals)—helps spot opportunities and risks at a glance.