Chapters

Chapters

Lesson 02 / 04

In this lesson

What you own in total
The fuller holdings list
Beyond company names
A reason for the overlap

When funds own the same investments

By STOCKS HELP

Trace the same company inside three holdings to see how much of your money depends on it.

Count Company A across all holdings.

Trace Company A through this hypothetical €10,000 portfolio.

Every bar uses the same euro scale: full width €10,000. Hatched sections are Company A.

Broad share fund€6,000
→ Company A: €240 (4% of this holding)
Industry share fund€3,000
→ Company A: €600 (20% of this holding)
Direct Company A shares€1,000
→ Company A: €1,000 (100% of this holding)

€240€600€1,000 = €1,840

Company A · 18.4%Whole portfolio · €10,000

Overlap means owning the same investments through different holdings. The €1,000 of direct shares is only part of your Company A exposure.

Both funds hold shares directly, without leverage. Values and holdings use the same valuation date and currency.

How the holdings add up

Broad share fund: €6,000 × 4% = €240 in Company A.
Industry share fund: €3,000 × 20% = €600 in Company A.
Direct Company A shares: €1,000 × 100% = €1,000 in Company A.

€1,840 ÷ €10,000 = 18.4% of your portfolio.

The industry's 20% applies to that fund: €600, or 6% of your whole portfolio. Adding the fund percentages directly mixes different bases.

What if Company A fell by half?

€1,840 × 50% = €920

If every other holding stayed unchanged, your portfolio would lose 9.2%. In reality, other holdings could move too. This example isolates one company's effect; it is not a forecast.

Look beyond the top ten.

A short list can reveal overlap; it cannot establish that everything else differs. Compare fuller holdings reports from the same date.

Find the right documents and class

Holdings report: The fuller investments list and its date.
Factsheet: Overview and top positions, not the entire portfolio.
Prospectus: Permitted investments, strategy and principal risks.

Use the provider’s website for the exact fund and share class. Check each report’s coverage and date; document names and disclosure requirements vary by country.

Global and regional funds can share companies, as can income and growth funds. Read their strategies alongside their holdings.

One fund can have several exchange tickers. Confirm the legal fund and class, using an ISIN where available: another ticker need not mean another portfolio.

Different names can hide similar exposure.

Compare industries, countries and debt types too. A property fund and local property-company shares can depend on the same market.

Look through funds and tracking methods

The same benchmark. Full holdings, sampling and other index-tracking methods can target much the same exposure despite slightly different securities.

A fund that owns other funds. Follow the layers far enough to identify main allocations and shared companies or sectors.

Derivatives and borrowing. The example uses directly held shares without leverage. Cash or collateral may not show a derivative’s return-driving exposure. Read the strategy and provider’s explanation before applying ordinary holding weights.

Give the extra fund a job.

Overlap may serve an intended regional or industry tilt. Compare combined weights with your plan; finding a duplicate alone does not justify an immediate trade. Costs and taxes matter too.

Record why you keep both

A broad fund: Can provide core market coverage.
An additional regional or industry fund: Can increase an existing part of that exposure.

Similar funds may help with account availability or dealing arrangements while retaining shared investment risk.

Keep a dated note of each fund’s role and substantial shared exposures. Revisit before adding a fund or after material changes to holdings or rules, without daily constituent checks.

Check your understanding

Try each question, then check your answer.

Choose questions from another chapter

How much is in Company X?

Half of your portfolio is in Fund A (30% Company X), half in Fund B (10% Company X). Both hold shares directly, without leverage, using the same date and currency. What is X's share of the whole portfolio?

40%.
10%.
20%.

Show the explanation

Correct answer: 20%.

Fund A puts 15% of your whole portfolio in X: 50% × 30%. Fund B adds 5%: 50% × 10%. Together that is 20%. Adding 30% and 10% would ignore how much of your money is in each fund.

Return to the explanation

Would you remove the overlap?

You added a regional fund to give that region more weight. It shares some companies with your broad fund. What would you check before deciding whether to keep both?

Whether the combined company and regional weights fit your plan.
Which fund has fewer repeated companies, so you can keep that one.
Whether each fund is diversified on its own; that settles the question.

Show the explanation

Correct answer: Whether the combined company and regional weights fit your plan.

You wanted more weight in that region, so some overlap may serve your plan. Check the combined weights first. Each fund can be diversified on its own while the pair still gives you more of a company or region than you intended. Costs and taxes also matter if you decide to change holdings.