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Funds 501: Avoiding Portfolio Overlap

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1.
If you own one fund run by Manager A, how many other funds of his or hers should you own if you value diversification?
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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.
2.
If you own a lot of growth funds, chances are you're overweight in what sector of the market?
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Technology. Current growth managers lean toward tech stocks.
3.
An online tool can help you find overlap in your portfolio.
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True. Firms such as Morningstar have special tools on their Websites to help you analyze your portfolio for overlap.
4.
If you have a lot of diversity among individual stocks, what does that say about your diversity in particular sectors of the market?
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It can't be determined. A diverse collection of stocks might actually share exposure to certain sectors. Tech is a good example of such a sector.
5.
For purposes of diversification, which parts of the Morningstar Style Box should attract each other?
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Opposite corners. Based on how the style box is structured, opposite corners will show the diversity.