Cool Investing Tools: Portfolio Instant X-Ray

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Sometimes we are not as diversified as we think we are.

To see what your portfolio actually looks like, rather than just what you want it to look like, you might find it useful to use a free Morningstar tool called the Instant X-Ray. The Instant X-Ray is easy to use.

Simply enter your holdings, include how much is in each holding and the Instant X-Ray sorts through their data and gives you a read on just how diversified you are.

Insight Into Your Portfolio’s Current Holdings

The process only takes a few minutes. For people who have investments in a couple of different places (Individual Retirement Account, 401(k), accounts) the tool allows you to aggregate your holdings in one spot and get an overall read on how well you’re meeting your diversification plan.

It doesn’t tell you how your holdings typically behave in relation to one another, so it’s not a guide to how effectively diversified your portfolio is, but it’s an interesting snap shot of what you own.

I used just the funds in my 401(k) to take the X-ray for a test drive. I don’t hold many bonds in there because we have a fair chunk of those in other accounts. So my 401(k) is heavy with equities, including emerging markets stocks and small company shares.

Here are the funds I hold in my 401(k):

  • DGS Wisdom Tree Emerging Markets Small Cap Dividend ETF
  • GMM SPDR S&P Emerging Markets ETF
  • IVE iShares S&P 500 Value ETF
  • IVV iShares S&P 500 ETF
  • IWC iShares Russell Microcap Index ETF
  • JKK iShares Morningstar Small Growth Index ETF
  • RYMFX Rydex Managed Futures Fund
  • SHY Barclays 1-3 Year Treasury Bond ETF
  • VBR Vanguard Small Cap Value ETF
  • VEU Vanguard FTSE ex-U.S. ETF

I’m pretty close to my target allocation in each, but I was still surprised by some of the information the X-ray brought to light.

Some Investment Portfolio Surprises

First and foremost, I was surprised to see that I’m 14% in cash. Given that I have so much in index funds, that was a a bit of a head scratcher. Second surprise: there are a fair number of foreign funds represented in my mix, 74% of my money is still in U.S. and Canadian investments. Only 9.8% is in Asia/Australia, and a paltry 3% in Latin America. (The geographic spread is highlighted in a nice world map display.)

Other features of the X-Ray showed that a good chunk of my investments are cyclical (37%) and that I don’t have much exposure to growth stocks in my U.S. holdings at all.

It tallied up my estimated mutual fund expenses at $1,345.00. That’s not an unreasonable per cent of my total portfolio but seeing it in dollars still packs a bit of a wallop.

If you’ve had experience with this tool, or others, please share your thoughts in the comments.

How does the Instant X-Ray rate in your book?

(photo: Michael Dorausch)
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