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1.
Why is portfolio overlap a greater risk for fund investors who also own individual stocks?
Because the investor's funds may also own this stock, making the investor's overall portfolio more concentrated than it seems. That means overlap.
2.
If you own one fund run by Manager A, how many other funds of his or hers should you own if you value diversification?
None. Managers generally have ingrained investment habits that they apply to every pool of money they run; they'll rarely use a growth strategy on one portfolio and a value strategy on another.
3.
An online tool can help you find overlap in your portfolio.
True. Firms such as Morningstar have special tools on their Websites to help you analyze your portfolio for overlap.
4.
If you own a lot of growth funds, chances are you're overweight in what sector of the market?
Technology. Current growth managers lean toward tech stocks.
5.
The Morningstar Style Box uses _______.
A fund's current portfolio. In order to gauge overlap, the box must use the most recent holdings.
