Mutual Fund Portfolio Overlap Tool, Common Stocks in MF, Stocks Overlapping (2024)

FAQs

Is there a mutual fund overlap tool? ›

The Mutual Fund Portfolio Overlap Tool is designed to evaluate the degree of overlap among mutual funds in your portfolio. Overlap occurs when multiple funds invest in the same underlying securities, potentially leading to reduced diversification and heightened risk.

Diversify across fund categories systematically: Investing in funds from different categories won't guarantee low overlap unless chosen strategically. For example, investing in large-cap, large & mid-cap, and multi-cap funds may still result in significant overlap due to their similar investment universe.

Portfolio Overlap in Mutual Funds refers to the extent of similarity or duplication among the holdings of multiple funds within an investor's portfolio. It occurs when different Mutual Funds hold many of the same stocks, securities or assets.

The overlap between them is given as the number of elements (holdings or monetary units when using market capitalisation) in common counting both portfolio A and B (i.e. double counting the common elements) divided by the total number of elements in portfolio A and portfolio B.

If there is a significant overlap in your funds' holdings, diversification across schemes is of limited help. That's why fund investors should actively avoid portfolio overlap.

If you fear you've missed out, but have even greater fear (rightfully) of chasing the hottest stocks, there could be a solution. The Vanguard Information Technology ETF (VGT 0.40%) has a long track record of market-obliterating performance. Here's why it could still be an ultimate long-term growth investment.

Can I Rebalance My Portfolio Without Selling? Yes, you can rebalance your portfolio without selling. If you're adding new money into the portfolio, buy the asset class that is underrepresented. If you buy enough shares, you can return the funds or individual holdings back to their preferred asset allocation.

Can you over-diversify a portfolio? Yes. Holding 50 stocks rather than 25 may lower your downside risk somewhat, but it can also reduce your profit potential. And at that point, it may be better to consider investing through an index fund, or even a combination of several sector-based funds.

The Rule of 72 is a well-known shortcut for calculating how long it will take for an investment to double if its growth compounds annually. Just divide 72 by your expected annual rate of return. The result is the number of years it will take you to double your money.

Financial planners say it is difficult to put a cap on the number of schemes in an investor's portfolio, as investors increasingly use mutual funds to meet both long-term and short-term goals. However, they feel investors should restrict themselves to 10 schemes, as a higher number is difficult to monitor and manage.

How to compare stocks in mutual funds? ›

It should be as little as acceptable because if there is a 50-70 per cent overlap then this diversification is only optical. Actually, there is very less diversification. You think that you have bought two-three investments but the underlying is common across the funds.

Overlap = min(A2, B2) - max(A1, B1) + 1. In other words, the overlap of two integer intervals is a difference between the minimum value of the two upper boundaries and the maximum value of the two lower boundaries, plus 1.

Formula and Calculation of Portfolio Variance

This means that the overall portfolio variance is lower than a simple weighted average of the individual variances of the stocks in the portfolio. The formula for portfolio variance in a two-asset portfolio is as follows: Portfolio variance = w₁²σ₁² + w₂²σ₂² + 2w₁w₂Cov.

QQQ and VOO Holdings Overlap

Of the 100 companies included in the Nasdaq-100, 78 are also included in the S&P 500. If we compare QQQ and VOO by the top 10 companies, 8 of them will match.

You can easily track your external mutual funds through INDmoney once you put in all the required information on the tracker. This includes the relevant data regarding your investments, your folio number etc.

The SCHD dividend is consistently twice that of VOO. The SCHD holdings are primarily large-cap blue-chip stocks. VOO and SCHD have a lot of holdings overlap. But VOO contains all U.S. stocks in the S&P 500 index, while SCHD contains only the top-value dividend stocks.

While there is no universal threshold, a common guideline suggests keeping overlap between ETFs below 50%.