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.
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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
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