Over the past weeks, ETF Express has asked what ETF education actually means for investing professionals.
Turns out it has everything to do with portfolio construction. And the myth that you’re diversified because you added a new fund. Adding a new ETF to your plate in 2026 requires less thought and effort than making another trip to the buffet.
“If you think about it, you can own a global ETF, an S&P 500 ETF, a technology ETF, an AI ETF and a semiconductor ETF and proudly tell me you own five funds. However, your portfolio might politely reply: ‘Congratulations, you really like Nvidia,’” says Andrea Acimovic, portfolio strategist at Elston Consulting, laying out the core problem, of distinguishing “between diversification by ticker and diversification by risk.”
Arun Subbiah, founder and CEO of Meteor, a startup that uses AI to help investment professionals research and construct portfolios, says: “Most advisers are still ticking a box marked ‘diversified’ without ever running the numbers behind it. The overlap checkers that exist are a blunt instrument, they will tell you two funds share similar top holdings, but not how those stocks behave together under stress, or whether you have quietly doubled up on the same factor bet times over.”
Basic overlap checkers might be less useful in portfolio construction than checking the compatibility of zodiac signs before entering a relationship. You can reduce your percentage exposure to Nvidia, but still have a core dominated by it alongside Microsoft, Apple, Google and Micron. Whether additional funds work well together depends on your goals. Adding a sector fund focused on financials or consumer staples may dilute a big tech core but only broaden your bet on US equities as names like JPMorgan Chase and Coca-Cola become prominent players.
Acimovic takes it a step further, saying: “You can have completely different holdings but still be loading up on the same factor, sector, geography or macroeconomic sensitivity.” She thinks technology, such as AI, “should make look-through analysis dramatically easier” by helping investors not merely identify overlap, but understand it.
Acimovic adds: “Sometimes concentration is intentional and completely justified. The question is whether you know it’s there. True diversification isn’t about how many ETFs you own, it’s about how many genuinely different bets you own.”
Acimovic and Subbiah agree. That every ETF in a portfolio must earn its place and have a job to do.
Calling ETFs “a toolkit rather than a product category,” Acimovic argues that sometimes more tools aren’t better, they’re just more. She doesn’t see the challenge so much in getting an adviser to buy their first fund, but to understand when a three-ETF portfolio should stay as-is or when there’s strategic justification to expand it to 10 tickers.
Subbiah believes that “a new ETF earns its place by genuinely broadening exposure: filling a geography, factor or asset class gap that is actually missing.” In a portfolio that’s “already diverse,” he says the focus should shift to finding “a fund with a return profile that is meaningfully different from what is already held, not another version of the same large-cap exposure wearing a different label.”
For Subbiah, rather than asking if an ETF is good in isolation, advisers should ask if it fits their existing investment philosophy.
Acimovic concludes: “We have effectively gone from ETF adoption to ETF optimisation. And I think that’s ultimately where the industry needs to get to. Success shouldn’t be measured by squeezing another ETF into every portfolio. The winner isn’t the portfolio with the most ETFs. It’s the one where every ETF has a reason to be there.”
