Manage your portfolio — how many ETFs is enough, concentration risk, cash waiting on the sidelines, and rebalancing once a year

Someone in Daus’s DMs once bought six stocks at once. They felt they’d diversified, because six sounded like a lot. But all six were semiconductor companies, meaning companies that make or work with computer chips.

When the chip sector fell, all six fell together. They weren’t holding six investments. They were holding one investment split into six pieces.

This page is for you if you already hold more than one position, and you’re starting to ask: is all this balanced? Daus explains seven things here: how many ETFs is actually enough, the danger of concentration, splitting by goal, cash that’s waiting to be invested, arranging savings outside Moomoo alongside ETFs inside it, the dividend tax, and how to rebalance.

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Part 1 — How many ETFs is actually enough?

The short answer: for most beginners, one to three.

A single broad index ETFETF (Exchange Traded Fund)A fund that holds many stocks at once, and trades just like a regular stock.See it in the glossary → already holds hundreds of companies. An ETF that tracks the S&P 500, for example, holds America’s 500 biggest companies in one purchase. A second ETF is only useful if what’s inside it is different.

The problem is, plenty of people buy a second and third ETF whose holdings are almost the same. Look at the screenshot below. Four different ETFs, from four different fund managers, but the top three companies in all four are the same.

⤢

1. Same companies

🔍 Tap the image to enlarge

If you buy all four of these ETFs, you don’t get any extra diversification. You just pay four sets of fees for almost the same holdings.

How to check if your ETFs overlap

Use the Compare function in Moomoo. Line up the ETFs you hold side by side, and look at the Top 10 Holdings and Top 5 Industries sections. If the same names show up at the top in every ETF, they overlap. The full steps are in the Compare tutorial.

ETFs that usually do add diversification are ones that hold something different, for example markets outside America, smaller companies, or a different asset class like gold.

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Part 2 — The danger of concentrating in one sector

Back to that case of the six chip stocks. Why is it risky?

Companies in the same sector get hit by the same news. If chip demand slows, or there’s an export restriction, or the industry cycle turns, almost every company in that sector feels it at the same time. You can see this yourself in the Heat Map: stocks in one sector block usually move in the same direction on the same day.

Rough limits many investors use

There’s no official rule, but many investors use rough limits like these to avoid over-concentrating:

• One individual stock no more than roughly 5% to 10% of the whole portfolio.
• One sector no more than roughly 25% to 30%.
• Individual stocks overall stay a small part, with the bigger part in a broad ETF.

These limits aren’t law. But if one stock has become half your portfolio, that’s a sign to rethink.

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Part 3 — Splitting by goal (an example, not advice)

A good portfolio isn’t one split that fits everyone. It follows when you’ll need the money.

The simplest way is to separate your money by goal, and give each goal its own split:

Goal	When you’ll need the money	Example split (to explain the concept)
Emergency fund	Any time	None in stocks. Savings or a money market fund only
House deposit, car, wedding	3 to 5 years	A small part in a broad ETF, the rest somewhere stable
Children’s education	10 years or more	A large part in ETFs, reduced as the date gets closer
Retirement	20 years or more	A large part in broad stock ETFs

Notice one pattern: the further away you need the money, the bigger the stock portion can be. That’s because long-term money has time to recover from a fall. Short-term money doesn’t have that time.

As an example of what Daus personally does: money Daus might need in the near term doesn’t go into stocks at all. It sits in a fixed-rate savings product. Daus’s stock investing is for the long term, and the biggest part of it sits in a broad index ETF.

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Part 4 — Cash waiting to be invested

Sometimes you have cash in your account that hasn’t been invested yet. Maybe you’re saving up for next month’s purchase, or you just sold something.

This cash can sit in Cash Plus, Moomoo’s money market fund that pays a small daily return. It beats letting the cash sit idle earning nothing.

But there are two important things to know. First, without margin, Cash Plus doesn’t count as buying power until you redeem it. So tap Redeem first. According to the Trading Rules in the app, the redeemed amount can be used straight away to buy shares with no financing interest, but to withdraw to your bank you have to wait for the money to arrive (T+1). Cash Plus counts as buying power without redeeming only when both margin and SmartSave-Sell are on, and Moomoo itself says interest can be charged for one to several days in some cases. So don’t switch margin on just for this. Second, if SmartSave is switched on, any ringgit you newly deposit will also move into Cash Plus automatically the next morning. So if that money is meant for next week’s RSP, leave it as ordinary cash instead.

The full explanation is in the Cash Plus tutorial.

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Part 5 — Savings outside Moomoo (Versa Cash-i) and ETFs inside Moomoo: how to arrange them

Many people who message Daus have two places at once: savings in another app, such as Versa Cash-i, and ETFs in Moomoo. The question: “Which money should sit where?”

Short answer: separate by when you’ll need the money, not by app. Money you might need soon sits somewhere with a stable value that’s easy to take out. Only long-term money goes into ETFs.

What the money is for	When you need it	Example place
Emergency fund	Any time	Bank savings, or a money market fund like Versa Cash-i
A big planned expense	1 to 3 years	Somewhere with a stable value, not shares
Retirement, children’s education	5 years or more	Broad index ETFs in Moomoo

Why can it help to keep short-term money outside Moomoo?

• Less temptation. When your emergency money sits next to the Buy button, it’s too easy to “put a bit in” when the market drops. Different app, different intention.
• Quick to take out. With Versa Cash-i, for example, if you request a withdrawal before 10am on a working day, the money reaches your bank the same day. In Moomoo, if you first have to sell shares, the sale money waits T+2 working days before it can be withdrawn.
• Share prices don’t wait for your emergency. If your car breaks down while the market is 20% down, you’d be forced to sell at a loss. Emergency money in a stable place avoids that.

One thing people forget: a money market fund like Versa Cash-i isn’t a bank deposit either, so it isn’t protected by PIDM. Its value is far more stable than shares, but it’s still an investment. If you want PIDM protection, that’s a bank savings account or FD.

Daus does this himself. His safe money sits in ASB and Versa Cash-i, and his long-term investing is in ETFs. The amounts follow Daus’s situation and aren’t a recommendation for you.

When you work out your split, include every place. If you have RM10,000 in Versa Cash-i and RM10,000 in Moomoo ETFs, your real split is 50% cash and 50% shares, even though the Moomoo app shows 100% shares. The full explanation for money you need within 1 to 3 years is in short-term money, and about Versa at versa.dausdk.com.

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Part 6 — The 30% dividend tax in your portfolio maths

If your portfolio holds a lot of US stocks or ETFs, remember that dividends from the US are cut by 30% in the US before they reach you. This is a US government withholding tax on foreign investors, not a Moomoo charge.

What this means for your portfolio: if you compare two ETFs with similar returns, the one that pays a higher dividend actually gives you a little less than the stated figure, because 30% of its dividend is cut. For long-term investors who don’t need the income right now, this is a small factor worth keeping in mind.

The fuller explanation of dividends is in after your first buy.

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Part 7 — Check and rebalance, once a year

Over time, your portfolio’s split will drift away from its target. The part that’s gone up becomes bigger, and the part that’s lagged becomes smaller.

For example, say you start with a target of 80% ETFs and 20% individual stocks. A year later, those individual stocks have risen a lot, and now the split is 65% ETFs and 35% individual stocks. Your portfolio is now riskier than what you planned, even though you didn’t do anything.

Rebalancing means bringing that split back to the target.

How to see your current split in the app

1. Open Accounts → Assets → Securities. Net Assets is the total of all stocks, ETFs and cash in that account.
2. Scroll down to Positions. The MV/Qty column shows each holding’s Market Value (current value) on the top line and the number of units below it.
3. Work out each holding’s share: that holding’s Market Value ÷ Net Assets × 100. For example, if one ETF is worth RM6,500 and Net Assets is RM10,000, that ETF is 65% of the account.
4. Have savings or investments elsewhere (such as ASB, Versa or Tabung Haji)? Add them into your own sums, as in Part 5.

⤢ab

1. aNet Assets = account total
2. bMV = value of each holding

🔍 Tap the image to enlarge

Every number on the account screen is explained in reading your Moomoo account screen.

The cheapest way to rebalance

You don’t need to sell. The cheaper way is to direct new money toward the part that’s become small. In the example above, for a few months, put all your monthly money into the ETF until the split gets back close to 80%. You avoid selling fees, and you don’t lock in a gain or a loss.

If the split has drifted too far, then think about selling part of the oversized portion. Remember, that sale money can’t buy something else straight away:

When should you do this?

Once a year is enough for most people. Pick a date that’s easy to remember, for example the first day of January, or your birthday. Checking more often than that usually just makes you act too much.

My annual portfolio review

This portfolio's main goalTarget splitCurrent splitThe single biggest stock or sectorWhat I'll changeNext review date

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Summary

1. One to three ETFs is enough for most beginners. More isn’t automatically safer if the holdings overlap.
2. Check for overlap with Compare → Top 10 Holdings.
3. Six stocks from one sector is one bet, not six.
4. Split by when you’ll need the money, not by what other people are doing.
5. Cash waiting to be invested can sit in Cash Plus, but keep it as ordinary cash if it’s for an RSP.
6. Emergency and short-term money sits outside shares, and you count your split across every place.
7. Once a year, check your split and direct new money toward the part that’s small.

This is a sharing of concepts and an example of what Daus personally does, not financial advice. The right split for you depends on your own circumstances. Stocks and ETFs can fall in value, and past performance doesn’t guarantee future performance.