An investment error that is common to a lot of investors is that they tend to look at their mutual fund portfolio and stock holdings exclusively. Investors look at their mutual funds as one investment basket while stocks as another. While this investment approach can prove to be useful when you want to take opportunistic bets, it can turn out to be harmful for your long-term investment goals.
We say this because when you donít look at all your investments as one, you donít achieve the right kind and amount of diversification across sectors. There will always be the risk that you will be heavily invested in one particular sector and wouldnít have adequate exposure to the others.
Letís suppose you want to invest in X company because youíre bullish about the prospects of its sector. So you buy shares of X company, but what if the mutual funds you own already have a high exposure to this stock? If such is the case, you would be heavily invested in one stock and would miss out on opportunities in another sector. That is why it would be important for you to first check if the mutual funds youíve invested in already own the stock that interests you or not, and in what quantity.
This sounds tedious, but donít worry, you donít have to look up the portfolios of every fund that you own. All you need to do is access the Value Research Who Owns What (WOW) tool.
Available on the homepage of www.ValueResearchOnline.com, WOW tells you exactly how much of a stock is owned by which funds. Start by entering the company name and clicking on the ĎGet dataí button. The next window will give you a list of all the mutual funds that have invested in the company entered by you. This tabular list has the fund names, percentage of net assets invested in the stock, the amount (in crores) invested in the stock and the date when the fund last declared its portfolio.
The drop-down menu at the top of the table allows you to view investments in equity, long-term debt or short-term debt. Selecting a particular investment gives you a list of funds that fall under that category. You can also sort the list of funds in ascending or descending order by clicking on the column heads at the top of the table.
This is how WOW makes the tedious process of finding out which fund has invested in a stock a simple 3-click process. And the best part is... itís free!