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Are 17 equity ETFs too many?
#1
For my traditional IRA, I have 75% in equities and 25% fixed income that can pay my MRDs for the next 5 years. My equity position consists of 17 mostly broad based index ETFs, with a few conservative sector ETFs, all llow cost. There arises the question of redundancy and subsequent overlap. Interstingly, I did an analysis. There are only 2  that had similiar indexes: DGRO = Morningstar US Dividend Growth and HDV = Morningstar Dividend Yield Focus. But their composition and results differ. There are 4 that were different plays on the S&P 500, but each unique. So here they are: DGRO DIA FDUS FDVV FHLC HDV IEMG IVV IWM MDY ONEQ QUAL SPHD USMV VTV XLF XLP. All except IEMG are US centric. All have dividends, with an average portfolio yield a little over 2%. It is fairly conservative. No exotic sector plays. Light on tech. I put the final touches on this composition this week. So no historical performance figures. Be nice to beat the S&P 500 going forward. My intent is to have this portfolio for a  long long time. For my wife after I pass. Thru the inevitable ups and downs of the market. Curtail my exhorbitant # of trades, aside from rebalancing once a year. Regarding overlap, no doubt there is duplication of stocks, but the distribution amongst sectors appears well spread out, a little light in tech and a little heavy in consumer defensive. But that’s OK, being conservative. After 30 years of doing my own investments, this is the ending result.
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#2
Did you try using the Morningstar XRay tool (there's a free version available and you also get access to some advanced functionality by registering in t rowe price   - also free. This tool gives you some visibility into your % holding for individual stocks (and also the contributing funds). This can be useful to see if you have over/under exposure to a specific stock, and adjust your ETF weightages accordingly.

 
I think 17 is manageable, as long as there isn't too much overlap in terms of a small number of stocks (the XRay analysis will detect this). I have a relatively high number of stock ETFs too (22 at present). I'm stuck with several old and redundant ones (due to the large gains accumulated). My ETFs are across US and non-US, and there are several focused/narrow ones (AMLP for MLPs, BIZD for BDCs, MORT for mREIT, VNQ/VNQI for eREIT, FLGB for UK, HDV for US-dividend and XNTK/IGM for US Tech). Outside these and the duplicate/redundant ones, the rest are non-overlapping for index.  I'm still light on healthcare and tech and I may need to add one for the former and increase my tech exposure down the road.
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#3
(11-19-2018, 06:24 AM)Vilgan Wrote: Did you try using the Morningstar XRay tool (there's a free version available and you also get access to some advanced functionality by registering in t rowe price   - also free. This tool gives you some visibility into your % holding for individual stocks (and also the contributing funds). This can be useful to see if you have over/under exposure to a specific stock, and adjust your ETF weightages accordingly.

 
I think 17 is manageable, as long as there isn't too much overlap in terms of a small number of stocks (the XRay analysis will detect this). I have a relatively high number of stock ETFs too (22 at present). I'm stuck with several old and redundant ones (due to the large gains accumulated). My ETFs are across US and non-US, and there are several focused/narrow ones (AMLP for MLPs, BIZD for BDCs, MORT for mREIT, VNQ/VNQI for eREIT, FLGB for UK, HDV for US-dividend and XNTK/IGM for US Tech). Outside these and the duplicate/redundant ones, the rest are non-overlapping for index.  I'm still light on healthcare and tech and I may need to add one for the former and increase my tech exposure down the road.

You are correct. I do not now own any developed county’s market. Up until several months ago, I did own but sold: VGK: Europe nice dividend, but lagging US. Brexit messy. Italian banks high risk. VEA: Developed nations, non US, Asia, Europe, nice dividend. Lagging US. CQQQ: China tech. Scary bad. Bailed. So yes, is intentional. All US  entric ETFs, with the exception of IEMG, developing nations, that has fallen so far, that I think us a bargain, so bought last week. Especially if China and Trump resolve the tariff issue. I understand, that to be truly diversified, I should have developed nations. But it just seems to me there is a high correlation between their markets and U.S. Not much of a hedge advantage. And the US economy is now stronger than the rest of the world. There has never been a recession in the US with GNP growth over 2%. It was over 3% last quarter. So it seems to me that this aging/record breaking, 9 year old US bull market may still have some legs. I’ll stick with it.
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#4
Why do you want to own everything
there are fidelity zero cost products for that
imho buying all the things only works in a bull market
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#5
Actually, it is not my intent to buy ALL of the US stocks. One might think that the new -0- expense mutual fund FZROX:  Fidelity’s Zero Total Market Index (should say something about US, but doesn’t) does that. Especially with 2,508 holdings, out of 3,650 stocks that comprise the DOW Jones US Total Market index. BUT the top 10 stocks represent 18% of its total, comprised of the usual large cap suspects: AAPL MSFT BRK FB JPM JNJ XOM GOOG. That’s because it is capitalization weighted. Heavily biased to the big boys. I would imagine that each stock held 1.000 thru 2,508 is miniscule. Overall, it is defined as Large Blend. Seems to me my 17 ETFs contain alot less stocks, have a higher dividend at 2.25%, and less dilution. You mention that, “Buying all things only works in a bull market.”  Fine with me. The current bull market is 9 years old and is the longest in history. Have matched the averages returns over last 5 years. Hopefully has more legs to run. If not, got 25% of portfolio in fixed income to ride it out. Not smart enough to time the market. Also not smart enough to make large bets on individual stocks or exotic sector ETFs to try to be outperform the market. None of my positions exceed 5% of the total portfolio. So my portfolio of 17 ETFs results in the following, which is similar to the DOW Jones US Total Market Index.
   
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