Stock Intersection--what am I not seeing?

[frugal saver]

So once a year or so I do the Stock Intersection at Morningstar. That's where you list all your mutual funds, by fund and share amount, and all your individual stocks by name and share amount. Then hit "X-ray" and it gives you a combined list of all the stocks that you hold in both. (This is in the Pro account, not the free one.)

I currently have 7 mutual funds, all-market, large cap, medium cap, both growth and income, so it covers a lot of bases. (I'm limited right now in foreign stock.) When I run the X-ray, the "big 5"--Microsoft, Amazon, Apple, Google and Facebook are in all 7 of my funds.

But what bothers me is some of my individual stock holdings are not also held by any of the 7 mutual funds. And it makes me wonder if the mutual fund managers are seeing something in the stocks that I'm not. Some of the stocks are Emerson Electric EMR, Clorox CLX, General Mills GIS, Southern SO, and Caterpillar CAT.

So I'm not sure if it's the stocks or the mutual funds. Of course two of the mutual funds are holding General Electric GE, so there's that.

Opinions? It's kind of making me re-think my stock picking ability--or lack of.

[disneysteve]

Are all of your funds actively managed vs. being index funds?

[frugal saver]

All are actively managed through T. Rowe Price.

[disneysteve]

So you want to know why you personally picked stocks that your fund managers didn't.

There are about 3,500 stocks listed on US exchanges. I don't think it's any big surprise that you might happen to pick a few that aren't held in your mutual funds. If you analyze the fund holdings, I suspect you'll find that each of those sectors is represented by some other companies - just not the same ones that you picked. You already gave one example of GE vs. EMR.

If anything, it's probably good that the holdings don't all overlap from a diversification standpoint (although with 7 funds you're already well diversified).

I'd say the bigger question is if your actively managed funds are cheaper and better performing than the corresponding indexes.

[~bs]

actively managed funds hold much smaller quantity of funds, possibly as small as 20 or 30. It really depends if those fit into their portfolio style and market cap size.