Calculators

Mutual Fund Portfolio Overlap

Calculate and assess the overlap of stocks in your Mutual Fund Portfolios

What is a Mutual Fund Portfolio Overlap ?

Mutual Fund Portfolio Overlap is the process of identifying and calculating the common stocks and their average weightage between multiple mutual fund schemes.

Using this tool, you can compare the portfolios of the funds, compute the overlap, identify the top 5 stocks by their average weightages.

This analysis can be a valuable input when considering adding a fund to your portfolio and evaluate the increase of exposure to some companies in your portfolio.

These insights help investors diversify their investment portfolio effectively, reducing risks with overconcentration in certain stocks and thus leading to cost optimisation.

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Frequently Asked Questions
What is the Mutual Fund Portfolio Overlap Tool?
The Mutual Fund Portfolio Overlap Tool is designed to evaluate the degree of overlap among mutual funds in your portfolio. Overlap occurs when multiple funds invest in the same underlying securities, potentially leading to reduced diversification and heightened risk.
How do I find Mutual Fund Overlap?
The Mutual Fund Portfolio Overlap Tool is designed to identify Mutual Fund Overlap. Our tool allows you to select and compare up to five mutual fund schemes. It performs an in-depth analysis to identify overlaps, ranking the combinations of funds by their percentage of overlap in descending order.
How does the Mutual Fund Portfolio Overlap Tool identify Mutual Fund Portfolio Overlap?
The Mutual Fund Portfolio Overlap Tool conducts a thorough analysis of the mutual funds entered, studying and examining each and every stock in the mutual fund schemes to identify any overlaps.
What will be considered excessive overlap in a Mutual Fund Portfolio?
While the Mutual Fund Portfolio Overlap Tool provides valuable insights, the results should not be evaluated in isolation. It's not intended for making final investment decisions. We recommend consulting with a qualified financial advisor for a comprehensive evaluation of what constitutes excessive overlap in the context of your overall financial strategy.
How can I effectively reduce Mutual Fund Overlap?
To minimise Mutual Fund Overlap, one should refrain from investing in too many schemes or having multiple schemes of the same category. It is essential to review your entire financial plan with a qualified financial advisor who can assist you in consolidating your portfolio. This holistic approach ensures that any adjustments to your mutual fund investments align with your broader financial strategy.
What are the risks associated with Mutual Fund Portfolio Overlap?
The main risk of Mutual Fund Portfolio Overlap is increased exposure to specific stocks, which can amplify portfolio volatility and potential losses. Mutual Fund Portfolio Overlap Tool helps identify these overlaps, providing a broader view of your portfolio's diversification.
How can I diversify my Mutual Fund Portfolio?
One option is to include index funds, such as Nifty 50 Index funds or Nifty 100, to enhance diversification. Avoid choosing the same category funds. It is always advisable to seek qualified advice when making financial decisions rather than relying solely on tools or calculators for portfolio diversification.
How often should I review my Mutual fund portfolio for overlap?
Regular reviews are crucial. The analysis can be a valuable input when considering adding a new mutual fund to your portfolio. We also recommend conducting an overlap analysis quarterly or whenever there are significant changes in your financial strategy or market conditions.
Is the Mutual Fund Portfolio Overlap Tool suitable for all types of investors?
The Mutual Fund Portfolio Overlap Tool is beneficial for a wide range of investors, from beginners to experienced ones. However, it should be used as part of a broader investment strategy developed with qualified financial advisors.
Disclaimer

This tool is solely to raise awareness and understand potential investment benefits. It is not intended to offer any specific financial advice regarding your mutual fund investment decisions. For personalised guidance on mutual fund investments, please consult with a qualified financial advisor.

Mutual fund investments are just one component of your holistic financial planning. Reflect on your financial behaviour and chart a path towards a balanced financial strategy.

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How Can the Mutual Fund Portfolio Overlap Tool Benefit You?

Navigating the ever-changing landscape of mutual fund investments can be challenging. Investors frequently gravitate towards a variety of schemes, inadvertently leading to over-diversification. There's a common misconception that investing in a wide array of schemes, such as New Fund Offers (NFOs), automatically results in diversification. However, this approach can be counterproductive.

In reality, a considerable number of mutual fund schemes often invest in the same stocks, particularly within similar fund categories. For example, it's not uncommon for two distinct large-cap funds to have a substantial portion of their portfolios invested in the same stocks.

This Mutual Fund Portfolio Overlap Tool is designed to address these challenges by providing a clearer picture of your investment portfolio. It helps identify overlapping stocks across different schemes, enabling you to make more informed decisions about your investments.

By using this tool, you can avoid unnecessary over-diversification and focus on creating a truly diversified portfolio that aligns with your investment goals and risk tolerance. Additionally, it simplifies the process of portfolio analysis, saving you time and effort in understanding the complexities of your investments.

Advantages of Using the Mutual Fund Portfolio Overlap Tool
Enhanced Cost Efficiency:
Holding more mutual fund schemes in a portfolio often results in increased costs due to higher expense ratios, without necessarily achieving the desired financial targets. By identifying and minimising such mutual fund overlaps, investors can refine their portfolio, thereby enhancing cost efficiency.
Reduced Unintended Risk:
Investors unknowingly expose themselves to higher risk by not understanding the extent of overlap in their portfolio. If a particular underlying security underperforms, it could significantly impact multiple funds, intensifying potential losses. Identifying and addressing these common stocks is crucial for risk management.
Simplifying Complexity and Saving Time:
Manually identifying overlapping underlying securities and comprehending their capitalization exposure is a complex and time-consuming task. Most investors lack the expertise and time required for this level of analysis. Leveraging technology, such as the Mutual Fund Portfolio Overlap Tool by 1 Finance, simplifies this process and provides actionable insights.
Importance of Identifying Common Stocks

Recognising the common stocks within your Mutual Fund Portfolio is crucial for achieving true diversification. This knowledge allows investors to make well-informed choices, ensuring that their portfolio is diversified in a strategic manner.

The 1 Finance Mutual Fund Portfolio Overlap Tool

Our Mutual Fund Portfolio Overlap Tool provides investors with detailed insights into their mutual fund investments. Here's how it works:

Compare up to 5 Mutual Fund Schemes:
Analyse the portfolio overlap across up to five mutual fund schemes at once. 
Highlights the top 5 stocks with weightage:
Identify the top 5 stocks with their weightage in your portfolio, helping you understand where your investments are most concentrated.
Identify portfolio overlap:
The tool reveals which schemes have significant overlap in stock weightage, aiding in refining your portfolio for better diversification and reduced redundancy.

In the ever-evolving landscape of mutual fund investments, strategic decision-making is paramount. The 1 Finance Mutual Fund Portfolio Overlap Tool empowers investors to make informed choices, optimise their portfolios, and confidently navigate the complexities of the market. Take control of your investments today by unlocking the insights that true portfolio diversification can offer.