ETF overlap happens when two or more funds in your portfolio hold many of the same companies, so owning both doesn’t spread your money the way their different names suggest. The good news is that the check is simple, and one fix is redirecting your next few deposits.
This matters most for people who’ve done the sensible thing and bought several diversified funds. An S&P 500 fund, a total market fund and a growth fund can look like three separate choices. AAII’s journal points out that funds like these can all be dominated by the same mega-cap tech stocks, so when those stocks fall, the whole portfolio can fall with them. Below, you’ll see a quick method for finding overlap, a worked example with two popular fund types, tools that do the heavy lifting and ways to fix it.
The 15-Minute Check
Here’s the whole process in six steps. You can do it with a notepad or a spreadsheet.
- List every fund you own. Include your 401(k), IRA and brokerage accounts. Write the dollar value of each.
- Find each fund’s top 10 holdings. The fund company’s page shows them, along with the percentage each company makes up.
- Make a table of company names. Put one column per fund, and write each company’s weight under the fund that holds it.
- For each company, multiply the weight by your dollars in that fund. That’s your dollar exposure to the company through that fund.
- Add across funds. The total is what you really own in that company.
- Divide by your whole portfolio. That’s your true weight.
If the same names show up near the top for most of your funds, you’ve found overlap.
AAII suggests a few more checks beyond holdings: look at whether your funds cover different styles (growth, value, low volatility) and industries, and review how each fund performed in past downturns to see if they move together.
What the Math Looks Like With Two Funds
Let’s try it with two of the most popular U.S. funds, VOO (S&P 500) and VTI (total market). The weights below are invented for this example:
| Company | In VOO | In VTI |
|---|---|---|
| Nvidia | 7.6% | 6.4% |
| Apple | 6.7% | 5.9% |
| Microsoft | 4.9% | 4.4% |
Now suppose you hold $20,000 in VOO and $20,000 in VTI, for $40,000 in total. Both the portfolio and the weights are invented.
- Nvidia: $20,000 × 7.6% = $1,520, plus $20,000 × 6.4% = $1,280. That’s $2,800, or 7.0% of your $40,000.
- Apple: $1,340 + $1,180 = $2,520, or 6.3%.
- Microsoft: $980 + $880 = $1,860, or 4.65%.
Those three companies add up to $7,180, which is 17.95% of the $40,000.
Compare that with holding all $40,000 in one fund. In VOO alone, the three are 19.2% of the money ($7,680). In VTI alone, they’re 16.7% ($6,680). So splitting the money between the two gives you a number in between. In this example you added little diversification. You blended two similar exposures.
That’s the heart of ETF overlap: two funds, one set of big bets. Real funds show the same pattern. A source quoted by WTOP says about 85% of VTI is the same stocks as VOO, and ETF.com’s table puts about 72% of VTI in the large-cap universe VOO covers. WTOP lists the same top five holdings in both funds: Nvidia, Apple, Microsoft, Amazon and Alphabet. It says the top 10 make up about 32% of VTI and about 38% of VOO.
Adding a Third Fund
Now add a growth fund with $10,000. Suppose, for the sake of this made-up example, that Nvidia is 10% of that fund.
- Nvidia in the growth fund: $10,000 × 10% = $1,000
- Total Nvidia: $1,520 + $1,280 + $1,000 = $3,800
- Total portfolio: $50,000
- Nvidia as a share: 7.6%
The portfolio looks like three funds, but your Nvidia exposure is now higher than it was with two. AAII warns that marketing labels can hide this, and says real diversification comes from combining ETFs that have different return drivers.
How Big Is the Issue?
Vanguard’s UK site puts a scale on the concentration in the biggest U.S. names. According to Vanguard, the “Magnificent 7” companies are roughly a third of US stocks in the MSCI ACWI, around 21% of the global index and just over 12% of a 60/40 portfolio (data as of May 2026).
That last figure is useful. It shows that if your portfolio is a mix of stocks and bonds, the exposure is diluted by the bond portion. If your portfolio is all stocks, or if it has several US stock funds, those same companies make up a larger piece of what you own.
Tools That Do the Math for You
You can do the check by hand, and for a small portfolio you may prefer to. If you have many holdings, there are tools:
- Morningstar Portfolio x-ray. AAII describes it as a premium “x-ray” feature that breaks funds into their underlying holdings. A commenter quoted in the article found their largest position was 8.3%, in Tesla.
- Sharesight’s exposure report. It breaks your holdings down by market, sector, country and individual holding. Sharesight says it is faster than checking each fund’s holdings by hand.
In my view, a spreadsheet works fine for a handful of funds.
Five Ways to Fix Overlap
Sharesight’s suggestion is to replace one of the overlapping ETFs with a fund that offers genuine diversification, such as a small-cap, international or bond ETF. Here’s how that could look in practice.
1. Stop adding to the duplicate
Don’t sell anything yet. Just send your next deposits somewhere else. This avoids any tax bill and gradually shifts the mix. My post on rebalancing without selling walks through the math.
2. Choose one US large-cap fund and make it your core
If you own an S&P 500 fund and a total market fund, you can keep one as your main US holding. My post on total market ETF vs S&P 500 ETF compares them in detail.
3. Add exposure to something different
Vanguard says US stocks are about 62% of the MSCI ACWI by market value (as of April 2026), so an international fund covers much of the rest of the world. A small-cap fund or a bond fund are other options Sharesight mentions.
4. Look inside your 401(k)
A target-date fund holds other funds, so it may overlap with an S&P 500 fund you also hold in the same plan. Check the top holdings of each. If you use a target-date fund, my post on how to choose a target-date fund covers how they work.
5. Keep some overlap on purpose
Sharesight points out that keeping overlap is fine if it’s deliberate, for example overweighting a sector you have strong conviction in. The key is making it a choice instead of an accident.
Overlap Beyond ETFs
The same issue applies to other kinds of holdings:
- Mutual funds and index funds. An S&P 500 index mutual fund and an S&P 500 ETF track the same index.
- Employer stock. If you hold shares of a company that is also a top holding in your index funds, your total exposure is bigger than the single position suggests. My post on reducing a concentrated stock position covers what to do.
- Funds inside funds. Target-date funds and balanced funds can hold other funds, so look at their top holdings, too.
A Quick Decision Table
| What you find | Next step |
|---|---|
| Same top holdings | Stop adding |
| Two S&P 500 funds | Pick one |
| All US stocks | Add different |
| Overlap is on purpose | Write it down |
A Second Example: One Stock Plus an Index Fund
ETF overlap isn’t only about funds. It also shows up when you own a single company’s stock and a fund that holds it. Here’s an invented example.
Say you own $10,000 of Apple shares directly and $40,000 in an S&P 500 fund. Assume Apple is 6.7% of the fund.
- Apple through the fund: $40,000 × 6.7% = $2,680
- Apple directly: $10,000
- Total Apple: $12,680
- Total portfolio: $50,000
- Apple’s true share: 25.4%
The direct holding looks like 20% of the portfolio ($10,000 out of $50,000), but your real exposure is 25.4% once the fund’s slice is counted. That’s why the look-through step matters.
A Simple Spreadsheet Layout
If you’d like to build the check once and reuse it every year, set up a sheet with these columns:
- Company name
- Fund A weight (copy from the fund company’s page)
- Fund B weight
- Fund C weight
- Dollars in Fund A, B and C (put these in a row at the top)
- Exposure in dollars, which is each weight times that fund’s dollars, added across funds
- True share of portfolio, which is the exposure divided by your total
Sort the sheet by the last column. The top of the list is where your money is actually concentrated. If the same five or six names fill the top spots, that’s the signal that you own more overlap than the fund names suggest.
Update the weights once a year. They change as markets move.
Signs You Might Have Overlap
- You own more than one fund with “S&P 500,” “total market,” “large cap” or “growth” in its name.
- Your 401(k) and your IRA both hold a US stock index fund.
- You hold individual stocks that are also large holdings in your funds.
- All your funds are US-focused, and Vanguard says US stocks are about 62% of the MSCI ACWI.
- A fund company’s page shows your funds sharing the same top five holdings.
If two or more of those apply, run the 15-minute check.
Let AI Calculate Your Overlap
Paste this into an AI assistant and fill in your funds. Copy the top holdings from each fund company’s website.
Help me find overlap in my investments using ONLY the data I paste below.
My funds, with the dollar value of each: [list]
For each fund, its top 10 holdings with percentage weights (copied from the fund company's page, with the date): [paste]
Total value of my portfolio: $[amount]
Rules:
- Ask me for anything missing before you calculate.
- For each company that appears in more than one fund, multiply each fund's weight by my dollars in that fund, add them up, and divide by my total portfolio. Show every step.
- Rank companies by my combined exposure.
- Do not guess any holdings or weights you weren't given. If something is missing, say so.
- Tell me which funds look most similar based only on the lists I gave you.
- Do not recommend buying or selling specific funds. Suggest categories I could research (for example, international, small-cap or bond funds), and tell me to confirm details on each fund company's official page.
- End with a short checklist to repeat this check once a year.
My Take: Diversified by Name Isn’t the Same as Diversified by Holdings
I think the most useful sentence in AAII’s article is the one about combining ETFs with different return drivers. It reframes the question. Instead of asking “how many funds do I own?” you ask “what is each one actually holding, and does it behave differently from the others?”
The example in this post suggests the answer for two funds like VOO and VTI is no, for the most part. That isn’t a flaw in either fund. It just means that doubling up doesn’t add what it seems to. Once you see that, the fix is cheap: change where next month’s contribution goes.
Questions People Ask About ETF Overlap
Is overlap always bad? No. Sharesight notes it can be a deliberate choice, such as overweighting a sector you have strong conviction in. It’s a problem when it happens by accident.
How much overlap is too much? In my view, look at your combined exposure to the top companies using the six-step check, and decide whether that level fits what you intended.
Do I need a paid tool? Not necessarily. AAII mentions Morningstar’s premium x-ray, and Sharesight offers an exposure report, but a spreadsheet works for a small number of funds.
Does owning bonds reduce the effect? Yes, by dilution. Vanguard notes the Magnificent 7 are just over 12% of a 60/40 portfolio, compared with around 21% of the global stock index.
Does a growth or tech fund add overlap to an S&P 500 fund? It can. Sharesight’s hypothetical example combined an S&P 500 fund, a Nasdaq-100 fund and a large-cap growth fund, and found heavy exposure to major technology companies. AAII describes the same pattern with S&P 500, total market and large-cap growth or technology funds. If you want a growth tilt, do the weight math first so you know how much extra you’re adding.
How often should I check? Holdings change as markets move, so the numbers will shift. In my suggestion, repeat this check once a year.
Copy Five Holdings From Two Funds
To check ETF overlap this week, you only need two fund pages and a calculator.
Pick your two largest funds, open each fund company’s page, and copy the top five holdings. If the names are mostly the same, send your next deposit to a fund that holds something different, and put a reminder on your calendar to repeat the check in a year.
This post is general information, not financial, tax or legal advice, and it does not recommend buying or selling any security. Fund holdings change often, so confirm current data with each fund company and consult a qualified professional about your situation.
Sources:
- ETF Overlap: The Hidden Risk in “Diversified” Portfolios — AAII Journal
- ETF overlap: How to uncover and manage hidden concentration risk — Sharesight
- Am I too exposed to the US — and does it matter? — Vanguard
- VTI vs VOO: Which Has Better Performance? — WTOP
- VTI vs VOO: Total Market or S&P 500 — ETF.com