Five funds. One bet.
Fund overlap is the most common and least examined problem in retail portfolios. You can own six ETFs and be far more concentrated than someone who owns one.
For research and education. Not financial advice.
How the overlap happens
Nobody sets out to own the same company five times. It happens structurally, because most popular funds are built the same way: weighted by market capitalisation. And if you weight by size, you end up holding the biggest companies — whichever fund you buy.
So: a total-market fund holds them. An S&P 500 fund holds them, more concentrated. A Nasdaq-100 fund holds them, more concentrated still. A technology sector fund holds them, more concentrated again. A "growth" fund holds them. And then you buy two of the individual names directly, because you like them.
Six purchases. Six tickers. One increasingly large bet on the same dozen companies — assembled without ever deciding to make it.
What to actually check
- The top ten holdings of every fund you own. Put them side by side. This single exercise is genuinely revelatory for most people, and it takes twenty minutes.
- The weight, not just the name. Two funds both "holding" a company means little; two funds each holding 8% of it means a great deal.
- Sector concentration in aggregate. Not per fund — across everything, as one portfolio. That's the number that matters, and it's the one nobody computes.
- What actually moves together. Overlap is the visible half; correlation is the other half. Two funds with no shared holdings can still fall in lockstep.
Why it only bites when it matters
In a rising market, concentration feels like conviction — your winners are winning, several times over. The problem is that the same arithmetic runs in reverse, and it runs hardest precisely when you were counting on diversification to soften the fall.
What we won't do. TRUE shows you the overlap, the concentration and the correlation. It does not tell you what to sell, what to buy, or how to allocate — that depends on your goals and risk tolerance, and it's a conversation for a qualified financial adviser. We just think you should be able to see what you own.
Frequently asked questions
How do I check ETF overlap?
Compare the top holdings and their weights across every fund you own, then look at sector concentration across the whole portfolio rather than fund by fund. TRUE's exposure analysis does this automatically, read-only.
Is owning several ETFs diversification?
Not necessarily, and often not. If they are all cap-weighted, they will all be dominated by the same largest companies. The number of funds tells you very little; what they hold, and in what weight, tells you everything.
Does TRUE tell me which fund to drop?
No. It shows you what your exposure actually is. What to do about it is your decision — TRUE does not give allocation advice.
Find out what you actually own.
Overlap, concentration and correlation — read-only, and honest.
For research and education. Not financial advice.