In this episode of “What’s the Risk”, we revisit the topic of ETF overlap. We’ve looked at it in the past highlighting a combination of several ETFs and how the portfolio construction had a small increase in holdings as we added ETFs, but a larger and larger concentration of its top 10 holdings. Here we revisit the point of diversification and and look at a few globally diversified portfolio options that an investor could use, with a small number of ETFs.
We also highlight portfolio concentration isn’t always a bad thing if there’s a evidence backed purpose behind it, but if it’s done unwittingly, an investor may end up with poor results they or portfolio volatility they didn’t expect.
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