Kite displays a sector concentration Nudge when you place an order that would push a single sector beyond 50% of your total holdings. The nudge shows your current allocation to that sector, the percentage it will reach if you proceed, and a suggestion to diversify to reduce sector-specific risk
Example scenario
If 7% of your holdings are in the Energy sector and your order would take it to more than 50%, Kite displays this
nudge
before you confirm.
Concentrating more than half of your portfolio in a single sector exposes you to sector-specific risk. If that sector underperforms due to regulatory changes, macroeconomic shifts, or industry-level events, a large portion of your portfolio is affected. The nudge does not block your order. It gives you a moment to decide with full awareness of the concentration risk.
You can:
- Proceed with the order if you are comfortable with the concentration in that sector.
- Review your holdings by visiting the Holdings section on Kite, and click on analytics to assess your sector-wise allocation on Console before making a decision.
- Diversify across sectors to spread risk, especially if your portfolio is in an early stage and sector exposure can shift significantly with each order.
Zerodha will provide an option to set sectoral limits for users in the future. To learn more about sector risks and analysis, visit the sector analysis module on Varsity.