Do You Know What You’re Buying?
As a financial advisor in Omaha, we know the importance of looking in detail at the investments we make for clients.
Here’s an example of how investors can think they are more diversified than they really are. The so-called FAANG stocks have been market darlings. This group is comprised of Facebook, Apple, Amazon, Netflix and Alphabet (Google).
What isn’t as well known is how often these same stocks appear in mutual funds and exchange-traded funds (ETFs) that sound as though they have different objectives.
For example, the two biggest ETFs managed by Vanguard are the Vanguard Total Stock Market and the Vanguard S&P 500. Their top 5 holdings, in order, are: Apple, Microsoft, Amazon, Alphabet and Facebook.
But these same 5 stocks are also the biggest holdings in the Vanguard Russell 3000 ETF, the Vanguard Russell 1000 ETF and the Vanguard Growth ETF.
Read more of this post from our Google My Business page.