Our Peer Review Service
Can portfolios be TOO Diversified?
This Sample client owns Texas Instruments and Microsoft in 9 different strategies
Bring a level of accountability to you relationship. If you really want to know what is going on with your investment portfolio get a portfolio audit done.
A peer review or portfolio audit is not an opinion on what investments should make up your portfolio. That would be very subjective. If you asked a hundred different advisors what belongs in a portfolio, you'd get a hundred different answers. In fact, the landscape is so big and there are so many funds out there you could ask a thousand different advisors and get almost a thousand different answers. Right now, there are over 11,000 active mutual funds in the United States.
Fund Names can be Misleading
Blending together "Mis=named" funds can inadvertently lead to:
Overlap
Hyper-diversification
Redundancy
Excess transaction costs
Hidden Costs of Portfolio Turnover
Higher turnover rates typically mean increased trading costs and taxes, which can reduce the fund's overall performance
Trading costs are typically not included in a fund’s expense ratio
An audit of your portfolio is a great way to know what you own and why you own it. It is more objective. The audit really speaks to efficiency. How well diversified is the portfolio? It will look at things like overlap of securities and goal redundancy of portfolio managers. It also highlights cost, looking at excess transaction costs so you do not spend any more money than you have to. Diversification is good however; hyper diversification is bad and can lead to waste. Key areas of your portfolio are scrutinized to find out what is working and what is not so you can spend time and attention where you need it the most.
Is the Bond Manager "Cheating'?
The Bloomberg US Aggregate Bond Index is "THE" benchmark for traditional fixed income. Many fixed income fund matched to the benchmark do not match its qualtiy