Is my portfolio actually diversified?

What does “diversified” actually mean?

Diversification is the old idea of not putting all your eggs in one basket. If one company has a bad year, it hurts less when that company is a small slice of everything you own.

The catch is that the baskets need to be genuinely different. Two funds that hold the same companies are closer to one basket with two labels. What matters is what's inside your investments, not how many separate names appear in your app.

Money can bunch up in a few different ways:

• One company. A big share of your money depends on how one business does.
• One industry. Lots of different companies, but all in, say, technology.
• One country. Everything depends on one economy and one currency.
• One type of investment. Everything in shares, with nothing in other types such as bonds or cash.

Why doesn't owning more funds always mean more diversified?

An index fund buys the companies on a list called an index: the S&P 500 (about 500 large US companies), for example, or a world index of thousands of companies across many countries. Most of these lists give the biggest companies the biggest slices.

That means the same few giants sit at the top of many different funds. On 16 October 2026, NVIDIA, Apple and Microsoft made up about 21% of one of the largest S&P 500 funds.¹ The same three were also the three biggest companies in the MSCI ACWI, a widely used world index of about 2,400 companies, at about 13%.² And US companies made up about 64% of one large fund that tracks that world index.³

So if you own an S&P 500 fund, a world fund and a few shares in big US tech companies, you may own the same handful of businesses three different ways.

What does overlap look like in a real portfolio?

Here's a made-up portfolio of $5,000. It's a sample, not a real person's account, and it isn't a suggestion of what to own. It has five holdings, so at first glance it looks nicely spread out.

Look through the funds and the picture changes. NVIDIA shows up three times: $600 held directly, about $157 inside the S&P 500 fund and about $77 inside the world fund. That's about $834, or 16.7% of the portfolio, riding on one company.

Add Apple and Microsoft the same way and 42.6% of this $5,000 depends on three companies, all in the same industry. Nearly 90% is in US companies.

That isn't automatically wrong. Some people choose to hold a lot in one place, knowing the trade-off. Whether a mix like this suits you depends on your own situation, which is a question for you, or for a licensed financial adviser. What matters is knowing it's happening.

How do I check my own portfolio for overlap?

1. List everything you own. Include every platform you use, and your KiwiSaver, with the dollar amount in each holding. KiwiSaver is invested too, often in the same kinds of funds.
2. Look inside each fund. Every fund publishes what it holds. Search the fund's name plus “top 10 holdings”, or open its fact sheet. For NZ funds, including KiwiSaver funds, the quarterly fund update has a “Top 10 investments” table. You can look funds up on Sorted's Smart Investor, or find the official copies on the Disclose Register.
3. Multiply it out. For each big company, multiply the dollars you have in the fund by that company's percentage. $2,000 in a fund that's 7.85% NVIDIA is about $157 of NVIDIA.
4. Add it up. Add each company's amounts across all your holdings, then do the same for countries. Divide by your total to get a percentage.
5. Notice the big numbers. Which companies, industries or countries carry most of your money? There's no single “right” number. You're looking for anything that surprises you.

Shortcut: you rarely need more than each fund's top 10. That's where the big overlaps live; the long tail of small holdings barely moves the totals.

How many ETFs is too many?

There's no magic number. One broad world fund can hold over 2,000 companies across dozens of countries. Ten funds can still be concentrated if they all hold the same things. How different your funds are on the inside matters far more than how many you own.

More funds can also mean more fees and more to keep track of, without spreading your money any further. Each fund charges its own fees, and some platforms charge every time you buy.

Does diversification mean I can't lose money?

No. Diversification spreads risk; it doesn't remove it. In a broad market fall, most shares tend to fall together, and a well-spread portfolio can still drop in value, sometimes sharply. What diversification does is reduce the chance that one company, one industry or one country has an outsized effect on everything you own.

Common questions