How Many ETFs Should You Actually Hold? The Data Behind Portfolio Overlap
Every week on Reddit and in ETF forums, someone posts their portfolio of 8, 10, even 15 ETFs and asks for feedback. The response is almost always the same: you're overcomplicating it, and you probably own the same stocks three times over.
But how many ETFs is the right number? Is there a point where adding another fund stops helping and starts hurting? We pulled the actual holdings data from Australia's largest ETFs to find out.
Data from ReviewETF.com.au, provider websites, and CBOE Australia. February 2026.
The Overlap Problem: You Probably Own CBA Six Times
Here are Australia's 10 largest ETFs by assets. Between them, they hold $105 billion — 31% of the entire Australian ETF market:
Rank | Ticker | Fund | Holdings | Top 10 Concentration |
|---|---|---|---|---|
1 | Vanguard Australian Shares Index | ~300 | 45% | |
2 | Vanguard MSCI International Shares | ~1,500 | 27% | |
3 | iShares S&P 500 | ~500 | ~35% | |
4 | BetaShares Australia 200 | 200 | 48% | |
5 | iShares Core S&P/ASX 200 | 204 | 48% | |
6 | VanEck MSCI International Quality | ~300 | 35% | |
7 | BetaShares Nasdaq 100 | 100 | 47% | |
8 | Vanguard Australian Shares High Yield | ~65 | 66% | |
9 | Global X Physical Gold | 1 (physical gold) | 100% | |
10 | Dimensional Australian Core Equity | ~200 | ~45% |
The "Holdings" column is the total number of individual securities in each fund. VGS holds about 1,500 stocks. NDQ holds exactly 100. VHY holds roughly 65.
The "Top 10 Concentration" tells you how much of the fund is in just 10 stocks. VHY is the most concentrated — its top 10 holdings make up 66% of the entire fund. VGS is the most diversified at 27%.
Australia's Most Over-owned Stocks
When you look under the hood of every major Australian ETF, the same names appear again and again.
If you hold VAS, A200, IOZ, and VHY, here's your combined exposure to the top stocks:
Stock | VAS | A200 | IOZ | VHY | In All 4? |
|---|---|---|---|---|---|
CBA | 8.97% | 10.8% | 10.61% | 9.09% | Yes |
BHP | 9.22% | 9.6% | 9.86% | 11.64% | Yes |
NAB | 4.77% | 5.4% | 5.27% | 7.24% | Yes |
WBC | 4.77% | 5.3% | 5.16% | 7.25% | Yes |
ANZ | 3.93% | 4.2% | 4.13% | 5.96% | Yes |
Wesfarmers | 3.40% | 3.2% | 3.16% | — | 3 of 4 |
Macquarie | 2.70% | 2.8% | 2.61% | 3.97% | Yes |
CSL | 3.16% | 2.7% | 2.61% | — | 3 of 4 |
Rio Tinto | 2.02% | 2.2% | 2.17% | 5.63% | Yes |
Telstra | — | 2.2% | 2.18% | 5.57% | 3 of 4 |
CBA and BHP appear as top-2 holdings in every single one of these funds. The big four banks collectively make up 22-30% of each fund. An investor who holds VAS + VHY doesn't have two diversified investments — they have a double-concentrated bet on Australian banks and miners.
The same pattern exists internationally. VGS, IVV, NDQ, and QUAL all hold NVIDIA, Apple, Microsoft, Amazon, and Alphabet in their top 10. Adding NDQ on top of VGS doesn't give you 100 new stocks — it gives you heavier positions in the same US tech giants you already own.
Stock | VGS | NDQ | QUAL | In All 3? |
|---|---|---|---|---|
NVIDIA | 5.50% | 8.7% | 4.59% | Yes |
Apple | 4.56% | 7.5% | 4.87% | Yes |
Microsoft | 3.60% | 5.9% | 3.76% | Yes |
Amazon | 2.72% | 4.6% | — | 2 of 3 |
Alphabet (combined) | 4.29% | 6.6% | 5.39% | Yes |
Meta | 1.84% | 3.8% | 5.21% | Yes |
Broadcom | 1.76% | 3.1% | — | 2 of 3 |
Tesla | 1.44% | 3.9% | — | 2 of 3 |
What Adding More ETFs Actually Does
The theory behind holding multiple ETFs is diversification — spreading risk across more stocks. But the reality depends on which ETFs you combine.
Combinations that ADD diversification:
Portfolio | What It Does | Approximate Unique Holdings |
|---|---|---|
VAS only | Australia's top 300 | ~300 |
VAS + VGS | Australia + 1,500 global stocks | ~1,800 |
VAS + VGS + VGE | Add emerging markets | ~5,000+ |
Going from VAS alone to VAS + VGS is the single biggest diversification jump you can make. You go from 300 Australian stocks to ~1,800 across 23 developed countries. Adding VGE (emerging markets) pushes you above 5,000 unique companies across 50+ countries.
Combinations that DON'T add diversification:
Portfolio | What Actually Happens |
|---|---|
VAS + A200 | 99% overlap. A200 is a subset of VAS. |
VAS + IOZ | 97% overlap. IOZ tracks the ASX 200; VAS tracks the ASX 300. |
VGS + IVV | IVV is already 70%+ of VGS. You're just increasing US concentration. |
VGS + NDQ | NDQ's 100 stocks are all inside VGS. You're doubling your tech weight. |
VAS + VHY | VHY is a subset of VAS — the high-dividend stocks from the same index. |
A200 + IOZ | Both track ~200 Australian stocks. Nearly identical. |
The most common portfolio mistake on Australian investing forums: Holding VAS + A200, or VAS + IOZ. These are essentially the same fund with different labels. You're not diversified — you're paying two sets of brokerage for the same exposure.
The Diminishing Returns of More ETFs
There's a point where adding another ETF stops improving your portfolio and starts adding complexity for no benefit.
The green line shows diversification benefit — how much of the investable global market you're exposed to. It rises sharply from 1 to 3 ETFs, then flattens. By 5 ETFs, you've captured almost everything. Going from 5 to 15 adds virtually nothing in diversification.
The orange line shows complexity — the administrative burden of rebalancing, tracking distributions for tax, managing DRPs, and making buy/sell decisions across multiple holdings. This rises linearly and eventually exponentially as you add funds.
The sweet spot is 3-5 ETFs. Enough to cover Australian shares, international shares, and 1-2 satellites (income, thematic, or defensive). Beyond that, each additional ETF adds more complexity than diversification.
The Optimal Portfolio: What the Data Suggests
Based on the overlap and diversification analysis, here's what actually works:
The 2-ETF Portfolio (Simplest)
ETF | Purpose | Holdings |
|---|---|---|
Australian shares | ~200-300 | |
International shares | ~1,500 |
Total unique holdings: ~1,800. This covers Australia + 23 developed markets. Simple, cheap, and genuinely diversified. For most investors, this is enough.
The 3-ETF Portfolio (Core + Emerging Markets)
ETF | Purpose | Holdings |
|---|---|---|
Australian shares | 200 | |
International developed | ~1,500 | |
Emerging markets | ~5,700 |
Total unique holdings: ~7,400. Adds China, India, Brazil, Taiwan, Korea — the growth economies that VGS and BGBL miss entirely. Minimal overlap between the three funds.
The 4-5 ETF Portfolio (Core + Satellites)
ETF | Purpose | Holdings |
|---|---|---|
Diversified core | 5,000+ | |
Australian dividend income | ~65 | |
Global infrastructure | ~130 | |
Gold (diversifier) | 1 |
The core diversified fund already holds Australian shares, international shares, and bonds. Satellites add things the core structurally misses: high-yield income, infrastructure, and gold. Each satellite serves a distinct purpose with minimal overlap.
What NOT to do
VAS + A200 + IOZ: Three funds holding the same ~200 stocks. Pick one.
VGS + IVV + NDQ: IVV is 70% of VGS. NDQ is 100% inside VGS. You're just tripling down on US mega-cap tech.
VAS + VHY + DIVI + SYI: Four Australian dividend funds. Massive overlap — BHP and CBA would be 15-20% of your total portfolio.
8+ ETFs "for diversification": If you need 8 ETFs, you probably picked funds that overlap heavily. Simplify.
Key Takeaways
3-5 ETFs is the sweet spot. Beyond that, you're adding complexity without adding diversification.
The biggest diversification jump is Australian shares + international shares. Going from VAS to VAS + VGS is the single most impactful change you can make.
VAS, A200, and IOZ are essentially the same fund. Pick one. Holding two or three is a waste.
Adding NDQ or IVV on top of VGS increases concentration, not diversification. Those stocks are already in VGS.
VHY is not diversification from VAS — it's a subset. If you hold both, you're overweight banks and miners.
CBA and BHP are Australia's most over-owned stocks. They appear as top-2 holdings in every major Australian ETF. If you hold multiple Australian ETFs, you might have 15-20% of your portfolio in just two companies.
The best satellite ETFs fill genuine gaps. Infrastructure (IFRA), gold (GOLD), emerging markets (VGE), and thematic plays (DFND, SEMI) add exposure your core doesn't have. Another Australian shares fund doesn't.
Research every ETF mentioned in this article on ReviewETF — check holdings overlap, sector breakdowns, and top positions before building your portfolio.
Sources: ReviewETF.com.au, Vanguard Australia, BetaShares, iShares, VanEck, CBOE Australia (February 2026).
This article is general information only and does not constitute financial advice. Consider your own circumstances and seek professional advice before making investment decisions.
