Mutual fund overlap: why owning six funds can mean owning one
Aeterna Wealth · figures from our fund data, updated 5 Nov 2026
Overlap is the share of two funds' portfolios invested in the same stocks. Among India's five largest large cap funds, any two share about 50% of their holdings, and a typical large cap fund is about 58% the same as a Nifty 50 index fund. Above about 50%, a second fund adds cost more than diversification.
What the data shows
- Five largest large cap funds: typical overlap between any two about 50%.
- Five largest flexi cap funds: about 33%.
- Five largest mid cap funds: about 30%.
- A typical large cap fund vs a Nifty 50 index fund: about 58%, at 2.07% a year for the Regular plan against 0.25% for the index fund.
Why it matters
Overlap hides concentration: five funds can end up with the same ten banks and IT companies at the top. You pay five expense ratios for what is close to one portfolio, and the diversification you think you have is not there in a fall.
How to check yours
- Put your funds side by side in our Compare tool: it shows the stocks they share and the overlap.
- Look at each fund's top 10 holdings in its latest monthly portfolio.
- Prefer funds from different categories or styles (for example a large cap index fund plus a mid cap and a value fund) over several similar flexi caps.
Common questions
How much overlap is too much?
If two funds share more than about half their portfolios, the second one adds cost more than diversification.
Is overlap bad in index funds?
Two index funds on the same index overlap almost completely by design; holding both adds nothing.
How is overlap calculated?
For each stock both funds hold, take the smaller of the two weights, and add them up.
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General information, not investment or tax advice for your situation. Mutual fund investments are subject to market risks; read all scheme-related documents carefully. Past performance does not guarantee future returns.