Your "Diversified" Portfolio Is Just an Expensive Index Fund | Brett Rentmeester

Mar 26, 2026

Brett Rentmeester, an investment pro specializing in portfolio construction and real assets, explains why piling into similar funds can turn your portfolio into an expensive indexed clone. He discusses overlapping holdings, inflated fees, the limits of stocks-and-bonds, and why adding fundamentally different assets and global exposure matters. Short, sharp, and eye-opening on what true diversification looks like.

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INSIGHT

Diversification Is About Low Correlation Not Count

Diversification means owning assets with different return patterns, not just more holdings.
Brett Rentmeester explains correlation is key and Markowitz showed diversifying idiosyncratic risk requires only ~10–50 stocks.

ADVICE

Avoid Creating An Expensive Index Fund By Overlapping Funds

Avoid layering many similar funds that overlap heavily in holdings.
Brett describes a client whose multiple large-cap funds had almost identical top 10 holdings and created an expensive index fund with a 0.65% average fee.

ANECDOTE

Client Example Of Overdiversified Large Cap Funds

A client brought multiple US large-cap funds that collectively held ~900 securities but shared the same top names.
Brett found the top 10 holdings across three funds were nearly identical, e.g., Microsoft and NVIDIA, yet cost ~0.65% on average.

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💡Get a free portfolio review with Brett Rentmeester and the team at Windrock to see if you're correctly diversified for this environment: https://bit.ly/40VUB24

You Asked, Brett Rentmeester Answers… Most investors believe more diversification means more protection, but Brett Rentmeester explains why that's not always true. In this interview with Maggie Lake, Brett reveals how layering too many similar funds creates what is essentially an expensive index fund, with overlapping holdings and inflated fees. He also explains why the classic stocks-and-bonds mix can fail simultaneously when inflation spikes, as we saw in the 1970s and after COVID. Brett breaks down what real diversification looks like: thinking beyond traditional assets to include hard assets, global holdings, and fundamentally different asset classes. If you think you're diversified, this conversation might change your mind.

💡Get To Know Brett Rentmeester: https://youtu.be/feoem3afC7w

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