That does not mean excessive portfolio turnover. Of FV’s five holdings, the same five ETFs found in the Focus 5 model used by professional investors, FBT is the newest addition. The biotech fund entered the model in June 2013. FDN and FXD have been a part of the model since the second quarter of 2009. FXH and FXG entered the model in 2011 and 2012, respectively.
Sector diversity is one issue investors need to consider. Health care has been on fire for over a year, leading to FBT and FXH combining for almost 42% of FV’s weight. Then there is some, albeit slight, single stock risk. [Study Your Biotech ETFs]
“Google (NasdaqGS: GOOG) has an almost 10% weighting in FDN which means Google has about a 2% weighting in FV’s current allocation. The answer to how much it too much is up to the individual but should be monitored for anyone who believes 2 to 3% in one stock is a lot,” writes Roger Nusbaum for TheStreet.com.
FDN’s top-five holdings combine for over a third of that ETF’s weight. Of FV’s other holdings, only FBT allocates more than 7% to any of its constituents.
FV Components
