Improvement
Diversification of a single ETF from the fund structure
For a portfolio with a single holding, edgio now reads diversification from the structure of the ETF: number of underlying holdings, sector mix and geographic reach. Before, it only said "not measurable".
For whom: Everyone
What is new
With a single holding there is no correlation between positions, so diversification used to have no value. If the only holding is an ETF that edgio knows, the Diversification view now shows how the fund itself is built: the approximate number of underlying holdings, the spread across sectors, and whether the fund is global, regional or tied to one country. edgio sorts such ETFs into broad world ETFs, broad regional ETFs and sector or theme ETFs.
The correlation matrix does not apply in this case, and a note explains that. For a single stock, a note says there is no spread between positions.
What this means for you
A portfolio made of one broadly spread ETF is no longer shown as "not measurable". The statement describes the fund structure and is not an assessment of your investment decision. With two or more positions, edgio calculates diversification as before.
Where to find it
The section is called Diversification and sits in Analysis. A short version appears in the Big picture tab of Analysis.
This entry describes an edgio feature. It is not investment advice. Disclaimer