Fund overlap - Portfolio X-ray

[Scooterd]

Investopedia Excerpt -

It can be very difficult for a retail investor to keep track of individual fund holdings, but a quarterly or annual check can help investors understand the strategy of each individual fund and provide an opportunity to compare top holdings from one fund with another.

If, for example, two separate mutual funds both have over-weighted the same stock, it might be worth replacing one of the funds with a similar fund that does not carry that stock as a top holding. If a specific sector is over-weighted in two funds (such as an overweight position in technology relative to the S&P 500), the investor will need to weigh the benefits and risks of this increased exposure.

While small amounts of overlap are to be expected, extreme cases of fund overlap can expose an investor to unexpectedly high levels of company or sector risk, which can distort portfolio returns when compared with a relevant benchmark.

>

For those that have multiple security assets and don't have access to Morningstar's Portfolio X-ray,  Here is alternative resource where you can access the tool (offered through 3rd party TD Ameritrade for free) to input your ETF's, Mutual funds, individual securities etc.. to check and ensure you are comfortable with the percentage of overlap that may exist within your overall investment portfolio. You can add by dollar value, percentage or share.

Be patient it may take a moment to load.  - https://www.tdameritrade.com/education/t...-xray.html

- Scoot

[fenders53]

I started a thread on this subject last year but not sure if anyone participated. I looked at about six funds and the top ten holdings were remarkably similar to SPX 500. Sometimes in the same order. That's one way to avoid underperforming the index. Good funds, but there was little value in holding more than one.

[Scooterd]

(01-22-2022, 12:16 AM)fenders53 Wrote: I started a thread on this subject last year but not sure if anyone participated.  I looked at about six funds and the top ten holdings were remarkably similar to SPX 500.  Sometimes in the same order.  That's one way to avoid underperforming the index.  Good funds, but there was little value in holding more than one.

Aside from my individual DG Securities I actually hold 2 (holdovers left alone from employment years)
1 is a large value, The other a large growth.

[fenders53]

I have index ETFs. SPY-QQQ and IWM which is Russell 2000. I probably should have went pure value with the small caps. If back tests very well as a fund to pair with SPY. I've owned the Russell for 28 years with no longterm regrets but I think 2022 might sting. Undervalued and the market doesn't care at all.

[rayray]

(01-22-2022, 12:16 AM)fenders53 Wrote: I started a thread on this subject last year but not sure if anyone participated.  I looked at about six funds and the top ten holdings were remarkably similar to SPX 500.  Sometimes in the same order.  That's one way to avoid underperforming the index.  Good funds, but there was little value in holding more than one.

i've always said this--and this goes for any fund of kind--look at the top 10/15/25 and you'll see the same companies over, over and over again.

i know of some really good individual investors that grab their favorite etf's/mf's and cherry pick the top investments to buy individually stocks, and they've been doing it for decades with that as their main research source--which is not really doing much research lol

a basic printer, paper and a high lighter lol then cross reference some basic metrics then there you go

[fenders53]

It's obvious what fund managers are up to. Can't embarrass yourself getting trounced by an index if you own the top 20.