Are your mutual funds secretly overlapping each other?

1. What is overlap in mutual funds?

Mutual fund overlap occurs when multiple mutual funds in your portfolio hold the same stocks. This reduces diversification and increases exposure to specific companies or sectors.

2. Drawback of mutual fund overlap

Owning 4 - 5 funds doesn’t always mean you are diversified. If they all hold the same stocks, your risk concentration remains high.

Adding more funds without checking for overlap can actually dilute returns, all while giving a false sense of diversification.

3. More funds ≠ more returns

4. How to check for fund overlap

Use the mutual fund overlap tool to identify common holdings. Focus on complementary categories, like pairing a flexicap fund with an index fund.

5. What should you do next?

Review your holdings timely to maintain diversification and streamline your portfolio with the help of a qualified financial advisor.