How do I check portfolio overlap between mutual funds, and how much is too much?

What the number actually means

Overlap is not "do these funds own some of the same shares" — almost every Indian equity fund owns HDFC Bank. It is how much of each fund, by weight, is in companies the other one also holds. Two funds with 60% overlap are putting 60 paise of every rupee into the same businesses. You are paying two management fees for one decision.

It matters because overlap is where diversification quietly dies. Four funds feels like four bets. If three of them are large-cap funds tracking the same thirty companies, it is closer to one and a half.

A real example, not an illustration

Four funds, Direct plan, Growth option. Overlap by disclosed portfolio weight, from the portfolios these fund houses filed up to 31 August 2026:

Read the top and the bottom row together, because that is the whole lesson. The two large-cap funds — different fund houses, different managers, different names — overlap the most, at 54.6%. They are both fishing in a pond of about a hundred companies, so they were always going to. The two flexi-cap funds overlap the least, at 31.8%, because one of them holds companies the other cannot: Parag Parikh's foreign holdings are simply not in HDFC's universe.

So "two large-cap funds for diversification" is mostly an illusion, and the mandate on the label tells you more about overlap than the fund house does.

What counts as too much

There is no regulatory threshold, and anyone quoting one as a rule is inventing it. What the arithmetic supports:

• Above 70% — treat them as one fund. Two names, one bet, two fees. Holding both adds cost and admin and almost no diversification.
• 50–70% — heavy. Worth a reason. Two funds in the same category usually land here, which is the argument against owning two.
• 30–50% — normal for two equity funds in a market this concentrated. Not a problem by itself.
• Below 30% — genuinely different bets. Usually means different mandates, different market caps, or one of them holds something outside India.

And the honest caveat: overlap is one input, not a verdict. Two funds at 55% overlap can still behave differently, because the other 45% and the position sizes are doing work. Overlap tells you how much of your money is duplicated. It does not tell you whether either fund is any good.

How to bring it down

Overlap falls when mandates stop competing, not when you change fund houses. Two large-cap funds from two AMCs overlap more than a large-cap and a small-cap from the same AMC. The levers that actually move the number are market-cap bands, mandates wide enough to hold different things, and simply holding fewer funds — the fastest way to cut duplicated exposure is to stop duplicating it.

How this is computed, and what it cannot see

From the portfolios the AMCs file: every security, its ISIN, and its percentage of net assets. For each pair we sum the smaller of the two weights across every company both funds hold — the standard weight-overlap measure, and the reason the answer is a share of the portfolio rather than a count of names.

The overlap figure is, for every security both funds hold, the smaller of the two funds’ weights in it, added up — each weight taken as a percentage of that fund’s whole disclosed portfolio (not its equity alone, and not only the holdings we could match). Two funds holding exactly the same book in the same proportions read 100%; two with nothing in common read 0%.

Matching is by ISIN, not by company name, because "Bajaj Finance Ltd." and "Bajaj Finance Limited" are the same company and a name match would miss it.

What it cannot see: a fund house that has not filed a portfolio is not in the store. Right now it holds 320,336 disclosed holdings across 2,399 schemes from 49 fund houses, dated to 31 August 2026. That is most of the industry by assets and not all of it. If a fund you ask about is missing, the page says so rather than drawing an empty chart — a blank donut reads as "zero", which would be false.

And disclosure is monthly and backward-looking. An overlap figure describes the portfolios as filed at month-end, not as they stand today.