Hi everyone! 
Over the last six months, I talked to many of you about how you use the Exposure Report. The main goal is to share these use-cases so everyone can get more value out of the report based on how others are using it.
There are basically 3 broad ways how the Exposure report is used.
Changes in market or individual sentiment.
By far the most common use cases is to understand exposure risk to a particular stock following a run up in share price. CBA.ASX (Commonwealth bank) comes up a lot. And part of the reason is also because many ETFs own CBA shares.
“…realised I had too many CBA shares so I sold down”
“…identified problem where we are massively overweight in CBA”
“…trying to work out if my mix of ETFs leaves me over exposed to over priced banks in Australia.”
A Canadian investor I recently talked to has similar concern on Canadian banks in his portfolio as well.
“…start trimming my exposure to the Canadian banks if they go over the current percentage and either holding cash or putting it into a fixed income (short term) instrument.”
And this also extend to NVDA, US big tech and the risk of AI bubble.
“…My NVDIA shares are currently 34.71% of my portfolio and I need to sell in stages to bring it down to 5%”
“…exposure to bubbles across entire portfolio, i.e. AI”
“…useful with US large cap tech giants, for example seeing where Tesla (negative view) is hiding in ETFs, or Nvidia when it has run hard and would like a little less exposure overall.”
From a macro perspective, the US came up quite a bit. Most of the people I talked to are Australian investors, and the shift in sentiment due to a combination of political, foreign trade policy i.e tariffs and fiscal policy has prompted them to re-examine and adjust their investments accordingly.
“..overexposed to US…gradual move to ex US inc Australian”
“..I use multiple ETFs and when DCAing I like to adjust the ratios to ensure I get the weighting I’d like, especially since November I’ve moved weight away from America and the exposure report gives me good visibility of this.”
“…I wondered about exposure to the USA and was alarmed when I saw the result”
A UK investor was particularly concerned about US debt level.
"…I feel that USD is at risk of medium to long term decline due to mounting US debt. I didn’t realise that I was as much as 25% exposed to USD in my SIPP…could have had a significant impact when it comes to liquidating my pension in 20 years time.”
Optimising portfolio
Most investors rely on the report to give them a snapshot of what they have or own now so they know what they need to buy next to get to their optimal portfolio. This include making sure the portfolio has adequate exposure to promising opportunities, an ideal range for each asset class, and avoiding excess overlaps between ETFs
“…size investments in individual stocks in a mostly ETFs based portfolio. I don’t want individual stock purchases to decrease excessively diversification….don’t want to deliberately drive an individual stock exposure to >5%”
“…Similarly with Microsoft, I intend to direct purchase some of them to move it into my top 10 holdings (combined direct and via ETF).”
“…investment type grouping allows me to get a view on the balance I have across different asset classes, so I use it to have a think on where to buy next.”
“…I will use it to look mainly at my ETFS and if I have 2 or 3 that have 80 or say 70% overlap, I will dig a little deeper and look at their unique holdings…wound up just selling the one with the worst performance or highest fees and rolling that into the other.”
“I purchase more shares / ETF’s each month…just trying to understand what I actually have purchased (via various ETF and LIC’s) and what my gaps maybe.”
“…i have particular diversification aims, and have picked ETFs to help balance this, some of my etfs overlap, so understanding the different balances of that has helped me to decide where to reinvest dividends”
Changes in investment strategy
The last one is changes in investment strategy. Quiet a few I talked to are gradually transitioning their portfolio from all direct shares to ETFs. But there are also some that started to add direct shares to their pure ETFs portfolio. And I believe most investors owns a combination of direct and ETFs.
“…simplifying my holdings to mainly ETFs but ensuring that I have exposure to the individual stocks I still preference”
“…Let’s say your portfolio is all ETFs and you want to add a single stock name. This report helps you see what the largest underlying stock exposures already are (usually they’ll be Microsoft and Nvidia and all the big US tech names), and to size the position appropriately.”
So I hope you find some of these use cases useful in how you can use the report in a different way. And let me know in the comments if you have your own unique way of using the report! 