From 24/7 Wall St. · Ryne Mauck · · 1m 20s
Remarried at 64 With Two Portfolios That Own the Same Things
Merging two retirement portfolios doubles risk. These 3 ETFs combine without overlap.
In brief
Merging two retirement portfolios doubles risk. These 3 ETFs combine without overlap. Merging two retirement portfolios that overlap creates concentrated risk. Three State Street ETFs eliminate duplication. Originally reported by 24/7 Wall St..
Two Portfolios Combine
Remarried couples with two separate retirement accounts often find overlapping holdings in their portfolios.
Three State Street ETFs
State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF covers US stocks, State Street SPDR Portfolio Developed World ex-US ETF covers developed markets abroad, and State Street SPDR Portfolio Aggregate Bond ETF covers bonds.
Why Overlap Doubles Risk
Merging two diversified portfolios can concentrate risk on the same big companies, reducing overall diversification.
SPTM Tracks US Stocks
SPTM covers US stocks with a 13.6 billion net asset value, including Apple at 6.1% of assets.
SPDW Covers Developed Markets
SPDW includes Japan, Australia, the UK, continental Europe, Hong Kong, Israel, South Korea, and Singapore.
SPAB Adds Bond Exposure
SPAB covers US debt with a 4.2% yield, but loses value as interest rates rise.
Paperwork Before Merging
Update beneficiary designations and account titling to avoid tax issues and inheritance problems.
Trade-Offs After Merging
SPTM focuses on big US companies, SPDW brings currency swings, and SPAB lags in strong markets.
What to remember
Merging two retirement portfolios that overlap creates concentrated risk. Three State Street ETFs eliminate duplication.
