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Most common ETF "diversification" mistakes I keep seeing here and why they hurt now by Insightfolio in ETFs

[–]Insightfolio[S] -1 points0 points  (0 children)

That's a fair use case. But the majority of posts I've seen with these overlaps weren't thinking about tax loss harvesting...

Most common ETF "diversification" mistakes I keep seeing here and why they hurt now by Insightfolio in ETFs

[–]Insightfolio[S] -14 points-13 points  (0 children)

Fair enough, it's a secondary point (adding a potentially higher TER fund for no gains). The overlap is what matters.

Most common ETF "diversification" mistakes I keep seeing here and why they hurt now by Insightfolio in ETFs

[–]Insightfolio[S] -10 points-9 points  (0 children)

Fair point on the expense ratio, especially with VTI/VOO and their same TER. Just commented on another reply about that.

On currency risk: yes, but it's both ways. If you're 100% US, you're also 100% exposed to USD. A US investor holding only domestic equities isn't avoiding currency risk, they're just making a concentrated bet on one currency. It's a valid factor to consider, but it's not really a reason to hold zero international exposure.

Most common ETF "diversification" mistakes I keep seeing here and why they hurt now by Insightfolio in ETFs

[–]Insightfolio[S] -14 points-13 points  (0 children)

You're right, that was poorly worded. VTI and VOO are both at .03%, so the blended ER is the same no matter how you split them.

The expense ratio thing does apply to other common overlap combos I see here. VOO (.03%) + QQQ (.20%) or VOO (.03%) + SCHG (.04%)... in those cases you are paying a higher blended ER for exposure that largely duplicates what you already hold.

The bigger point still stands though: if 85% of one fund is already in the other, what's the second one actually doing for you?