📊 Understanding Portfolio Overlap in Mutual Funds

When investing in mutual funds, many investors choose multiple schemes from the same category (like Multi-Cap Funds) thinking it will diversify their portfolio. But the truth is, sometimes these funds hold many of the same stocks – this is called Portfolio Overlap.

👉 Example from the table:

Axis Multi Cap Fund & Edelweiss Multi Cap Fund have 49% overlap – almost half of their holdings are the same.

Kotak Multi Cap Fund & HDFC Multi Cap Fund overlap is just 16% – giving more diversification.

✅ Why is this important? If you invest in funds with a high overlap, you are not really diversifying – you’re just repeating the same stocks through different funds. True diversification comes from choosing funds with low to moderate overlap so that your portfolio covers different opportunities and reduces risk.

💡 Key Takeaway:

Overlap below 20% = Good diversification

Overlap 20-40% = Acceptable

Overlap 40%+ = High duplication (be cautious)

• ️ Select the right funds with proper diversification
• ️ Avoid unnecessary duplication
• ️ Build a portfolio aligned with your financial goals

📞 Let’s review your portfolio together:

⚠️ Disclaimer: Mutual Fund investments are subject to market risks. Please read all scheme-related documents care