# Mutual Fund Portfolio Overlap Explained Author: Ankur Choudhary Author URL: https://getbelong.com/blog/author/ankur-choudhary/ Published: 2026-09-27 Category: NRI Investment Category URL: https://getbelong.com/blog/category/nri-investment-guide/ Meta Title: Mutual Fund Portfolio Overlap Explained Meta Description: What mutual fund portfolio overlap is, how SEBI calculates it, how to check your own funds, and when overlap actually matters for NRIs and residents. Tags: Mutual Funds Tag URLs: Mutual Funds (https://getbelong.com/blog/tag/mutual-funds/) URL: https://getbelong.com/blog/mutual-fund-portfolio-overlap/ ![featured-1790481130810-1790481132277.png](https://prod.superblogcdn.com/site_cuid_clx4a3rx6000caheo10zipfw1/images/featured-1790481130810-1790481132277-compressed.png) Six mutual funds. Four fund houses. Three categories. It looks like a well-diversified portfolio. Then you open the factsheets and find the same ten companies at the top of almost every fund. The same banks. The same IT giants. The same conglomerates. This is mutual fund portfolio overlap. It is one of the most common hidden risks we see in Indian portfolios. It rarely shows up on your statement, but it quietly shapes how your money behaves. In our [Belong](https://getbelong.com/) community, investors often discover overlap only after a sharp market fall. Their "diversified" funds all dropped together, because underneath, they owned the same stocks. This guide explains what portfolio overlap is and how SEBI measures it. It also shows how to check your own funds and when overlap actually matters. ## What Is Mutual Fund Portfolio Overlap? Portfolio overlap happens when two or more of your mutual funds hold the same securities. [HDFC Mutual Fund](https://www.hdfcfund.com/learn/blog/understanding-portfolio-overlap-mutual-fund-schemes-and-how-reduce-it) describes it as multiple schemes in your portfolio holding the same securities. This can lead to overexposure to certain stocks or sectors. In simple words, you think you own many different things. In reality, you own the same things several times. ### A simple way to picture it Imagine buying three different thalis at three different restaurants. You expect variety. But each thali has the same dal, the same rice and the same paneer. Only the pickle is different. You paid for three meals and got one meal three times. Overlap works the same way in your portfolio. 👉 **Tip:** The number of funds you own tells you very little. What matters is how many different companies you actually own, and in what proportion. ## Who Should Read This Guide? **If you are a resident Indian**, you likely hold several equity funds through SIPs started at different times. Overlap is probably already in your portfolio. **If you are an NRI investing in Indian mutual funds**, you may have added funds based on tips or rankings. Overlap can concentrate your India exposure even further. **If you are building a new portfolio**, understanding overlap now helps you avoid duplication from the start. This guide works for all three. We will point out where your situation changes the answer. ## Why Overlap Happens So Often in India Overlap is not always a mistake by the investor or the fund manager. Often, it is built into how Indian equity funds work. ### The same large companies dominate India's largest listed companies make up a big share of the overall market. Many diversified equity funds hold them, because they are liquid and well researched. So a large cap fund, a flexi cap fund and an index fund may all hold similar top names. ### Category rules push funds towards similar stocks SEBI defines what each equity category must hold. Its [categorisation circular](https://www.sebi.gov.in/legal/circulars/feb-2026/categorization-and-rationalization-of-mutual-fund-schemes_99983.html) says a large cap fund must invest at least 80% of total assets in large cap companies. With a fixed universe of large companies, two large cap funds will naturally hold many of the same stocks. That is not a flaw. It is the category doing its job. ### Flexible categories can drift towards large caps Flexi cap funds must hold at least 65% in equity, as per the same SEBI circular. But they can choose the mix of large, mid and small companies. Many flexi cap funds hold a large share in big companies. So a flexi cap fund can overlap heavily with a large cap fund you already own. ### Investors add funds without checking holdings This is the most common cause. People start a new SIP because a fund topped a ranking or a friend recommended it. Sometimes a new fund offer simply looked exciting. Few check whether the new fund holds the same stocks as their existing funds. ## How SEBI Measures Portfolio Overlap In February 2026, SEBI issued a circular that, for the first time, laid out a formal method for calculating overlap. This is now the standard way to think about it. Let us slow down here, because the method is simple once you see it. ### The SEBI method in three steps According to Annexure A of SEBI's [circular](https://www.sebi.gov.in/legal/circulars/feb-2026/categorization-and-rationalization-of-mutual-fund-schemes_99983.html): 1. **Find each stock's weight** in each fund, as a percentage of that fund's assets. 2. **Look only at common stocks.** Stocks held by only one fund count as zero. 3. **For each common stock, take the lower weight.** Add these up to get total overlap. [Tata Mutual Fund](https://www.tatamutualfund.com/blogs/sebis-new-mutual-fund-rules-2026-explained-know-latest-benefits-and-challenges) explains this the same way. Overlap is calculated using the lower weight of each common stock in the two schemes. ### An illustration Take two hypothetical funds, Fund A and Fund B. Stock Weight in Fund A / Fund B Counted overlap Stock P 10% / 25% 10% Stock Q 15% / 30% 15% Stock R 20% / 10% 10% Stock S 10% / not held 0% Stock T not held / 25% 0% Stock U 25% / 10% 10% Stock V 20% / not held 0% Add the counted overlap: 10 + 15 + 10 + 10. The total overlap is 45%. This means 45% of each fund's money is effectively invested the same way. Only the remaining portion is genuinely different. ### Why the lower weight is used Using the lower weight avoids overstating overlap. Say Fund A holds a little of a stock and Fund B holds a lot. Only the small shared portion is truly common. This is a fair, conservative measure. It is also easy to replicate at home with two factsheets. 👉 **Tip:** Overlap is not the number of common stocks. Two funds can share many stocks at tiny weights and still have low overlap. ## What SEBI's 2026 Rules Changed SEBI's February 2026 circular did more than define overlap. It set limits on it for certain fund types. ### Sectoral and thematic funds For sectoral and thematic funds, SEBI says no more than 50% of the portfolio should overlap with other equity schemes. Large cap schemes are excluded from this comparison. The overlap is computed quarterly, using the average of daily overlap values over the quarter. ### Value and contra funds Fund houses can now offer both a value fund and a contra fund. But the overlap between the two must not exceed 50%. ### A transition period Existing sectoral and thematic funds have three years from the circular date to comply. SEBI's circular says schemes that still fail the overlap test after three years must be merged with other schemes. ### Monthly overlap disclosure This is a useful change for investors. SEBI now requires fund houses to disclose category-wise portfolio overlap levels on their websites every month. In practice, you can check how much a fund house's schemes overlap with each other, without calculating it yourself. ### What these rules do not do The rules limit overlap _within_ certain categories at the fund house level. They do not control overlap in _your_ portfolio. Say you hold a large cap fund from one fund house and a flexi cap fund from another. SEBI's rules do not stop them overlapping. That part is still your responsibility. ## Using the New Monthly Overlap Disclosures SEBI's circular requires fund houses to publish category-wise portfolio overlap levels on their websites every month. The disclosure covers equity schemes against other equity schemes, debt against debt, and hybrid against hybrid. This gives you a shortcut. Before adding a second fund from the same fund house, check its overlap disclosure. ### How to use it - **Find the disclosure** on the fund house's website, usually in its statutory disclosures section. - **Look up the two schemes** you hold or plan to hold. - **Note the overlap level** and compare it across months. A consistently high overlap between two schemes you own suggests they are doing similar jobs. A falling overlap may reflect portfolio changes by the fund manager. ### What it will not show you The disclosure covers schemes within one fund house. It will not show overlap between funds from different fund houses. For that, you still need the method described above. ## Why Overlap Matters: The Real Risks Overlap is not automatically bad. But it changes your portfolio in ways you may not intend. ### 1\. Hidden concentration When the same stocks appear across several funds, your true exposure to them rises. It can be much higher than you realise. A fall in one large company can hit several of your funds at once. [HDFC Mutual Fund](https://www.hdfcfund.com/learn/blog/understanding-portfolio-overlap-mutual-fund-schemes-and-how-reduce-it) notes that overlap can concentrate risk in specific securities or sectors. This can make your portfolio more vulnerable to sector-specific shocks. ### 2\. Paying for the same thing twice Every active fund charges an expense ratio. If two active funds hold largely the same stocks, you may be paying two management fees for similar exposure. In high overlap cases, a single fund, or an index fund, could deliver similar exposure at a lower combined cost. ### 3\. Diluted fund manager value You choose active funds for the fund manager's skill. When you hold many overlapping funds, the unique ideas of each manager get diluted. Your combined portfolio starts to behave like the broad market, while you still pay active fund costs. ### 4\. False sense of safety This is the behavioural risk. Holding many funds feels safe. That feeling can stop you from checking what you actually own. When markets fall, overlapping funds tend to fall together. The diversification you expected may not show up when you need it most. ## When Overlap Is Not a Problem Not all overlap is harmful. Some overlap is natural and even acceptable. ### Overlap between a large cap fund and an index fund If you hold a large cap index fund and an active large cap fund, overlap is expected. The question is whether the active fund adds enough difference to justify its higher cost. Our comparison of [index funds and actively managed funds](https://getbelong.com/blog/mutual-funds/index-funds-vs-actively-managed-mutual-funds/) explains this trade-off. ### Overlap in the core of your portfolio Large, stable companies often form the core of a long-term portfolio. Some shared exposure to them across funds is normal. The goal is not zero overlap. The goal is overlap you understand and choose. ### Overlap when different funds serve different goals If one fund is for a child's education and another is for retirement, some overlap may be acceptable. Each goal has its own timeline and plan. Still, look at your combined exposure across all goals. Risk does not care which goal a rupee is labelled for. ## Overlap in Debt and Hybrid Funds Most overlap discussions focus on equity funds. But overlap exists in debt and hybrid funds too. SEBI's monthly disclosure explicitly covers debt schemes against other debt schemes, and hybrid schemes against other hybrid schemes. This recognises that duplication is not only an equity problem. ### In debt funds Two debt funds may hold bonds from the same issuers. If one issuer faces trouble, both funds can be affected. This matters most for credit risk exposure. Check the top issuers in each debt fund you hold. ### In hybrid funds Hybrid funds hold both [equity](https://getbelong.com/blog/equity-meaning/) and debt. Their equity portion often holds large, familiar companies. If you hold hybrid funds alongside equity funds, the equity parts may overlap. Include hybrid funds when you check overlap. ## What Overlap Does Not Tell You Overlap is a useful measure, but it has limits. Understanding them prevents over-reliance on a single number. ### Low overlap does not mean low correlation Two funds with different stocks can still move together. If both hold companies sensitive to the same economic factors, they may rise and fall at similar times. For example, two funds might hold different banks and lenders. Stock overlap looks low, but both depend on the same credit cycle. ### Overlap changes every month Fund managers buy and sell regularly. An overlap you measured last year may look different today. This is why SEBI measures overlap on a quarterly average of daily values for regulated categories. For your own review, check at least once or twice a year. ### Overlap does not measure quality High overlap between two good funds is less harmful than low overlap between two poor ones. Overlap tells you about duplication, not about whether a fund is well managed. 👉 **Tip:** Use overlap as one lens, alongside sector exposure, costs and fund quality. No single number tells the full story. ## How to Check Overlap in Your Own Portfolio You do not need special software. Here is a simple method. ### Step 1: List your equity funds Include every equity and hybrid fund you hold, including old SIPs you have stopped. ### Step 2: Download each fund's latest portfolio Fund houses publish monthly portfolios and factsheets on their websites. [HDFC Mutual Fund](https://www.hdfcfund.com/learn/blog/understanding-portfolio-overlap-mutual-fund-schemes-and-how-reduce-it) suggests using factsheets and fund manager reports to spot common holdings. ### Step 3: Compare top holdings first Start with the top ten holdings of each fund. Most overlap sits here, because these stocks carry the biggest weights. ### Step 4: Apply the SEBI method for key pairs For any two funds that look similar, list common stocks and take the lower weight for each. Add them up. ### Step 5: Check sector overlap too Two funds may hold different stocks in the same sector. You can have low stock overlap but high sector concentration. ### Step 6: Look at your combined exposure Estimate how much of your total equity money sits in your top five stocks and top three sectors. This is your real concentration. Many online platforms also offer overlap tools. They can save time, but check which date's portfolios they use. 👉 **Tip:** Check overlap before adding any new fund, not after. It is easier to avoid duplication than to undo it. ## How Much Overlap Is Too Much? There is no official limit for individual investors. SEBI's 50% threshold applies to specific fund categories at the fund house level. But SEBI's choice of 50% gives a useful reference point. If two funds in your portfolio overlap by more than half, they are doing much of the same job. Overlap between two funds What it suggests What to consider Low Funds are genuinely different Keep both if each fits your plan Moderate Some shared core holdings Check costs and roles High, above half Funds largely duplicate each other Consider keeping one Very high Near-identical exposure Consolidate, often into the cheaper option These bands are general guidance. The right decision depends on your goals, costs and tax position. ## A Simple Overlap Worksheet Use this worksheet for your portfolio review. It keeps the process quick and consistent. Question How to answer it What it tells you Which funds share a category? List funds by SEBI category Obvious duplication risks What are the top ten holdings? Check each factsheet Where overlap concentrates What is the pair-wise overlap? Apply the lower-weight method How much two funds duplicate What are the top three sectors? Add sector weights across funds Hidden sector concentration What is each fund's role? Write one line per fund Whether each fund earns its place ## Common Overlap Patterns We See Across portfolios we review, the same combinations cause most overlap. ### Two or more large cap funds This is the most common. Because the large cap universe is limited, two large cap funds often share many top holdings. ### Large cap plus flexi cap Many flexi cap funds hold a large share of big companies. Together with a large cap fund, overlap can be significant. Our comparison of [flexi cap and multi cap funds](https://getbelong.com/blog/mutual-funds/flexi-cap-vs-multi-cap-mutual-funds/) explains how these categories differ. ### Index fund plus large cap fund A Nifty index fund and an active large cap fund often overlap heavily. Decide whether you want the index, the active fund, or both for a clear reason. ### Several funds from one fund house Funds from the same fund house may share research and ideas. SEBI's new monthly disclosure helps you check this. ### Sectoral funds on top of diversified funds A banking or IT sectoral fund adds concentration if your diversified funds already hold large amounts of those sectors. Our guide on [sectoral funds versus broad market funds](https://getbelong.com/blog/mutual-funds/sectoral-mutual-funds-vs-broad-market-funds/) covers this. For theme-based funds, see our comparison of [thematic and diversified funds](https://getbelong.com/blog/mutual-funds/thematic-mutual-funds-vs-diversified-funds/). ## How to Reduce Overlap Without Disrupting Your Plan Once you find overlap, act calmly. Rushed changes can cost more than the overlap itself. ### 1\. Assign each fund a clear role Every fund should have a job. A core large cap exposure, a mid or small cap growth sleeve, a global allocation. Funds without a clear role are candidates to remove. Our guide on [how to build a mutual fund portfolio](https://getbelong.com/blog/mutual-funds/how-to-build-a-mutual-fund-portfolio/) explains how to structure these roles. ### 2\. Keep one fund per role Two funds doing the same job rarely add much. Keep the one with the better fit, cost and consistency. Our comparison of [too many mutual funds vs too few](https://getbelong.com/blog/mutual-funds/too-many-mutual-funds-vs-too-few/) explores the right balance. ### 3\. Diversify across market caps deliberately Instead of several large-cap-heavy funds, choose funds that genuinely cover different segments. Our guide on [large cap vs mid cap funds](https://getbelong.com/blog/mutual-funds/large-cap-vs-mid-cap/) explains how these segments behave differently. ### 4\. Stop new SIPs before selling old units The simplest first step is often to stop SIPs into overlapping funds and redirect them. You can decide on existing units later. ### 5\. Consider tax and exit loads before selling Selling units can trigger capital gains tax and, in some cases, exit loads. Our guide on [tax when withdrawing from mutual funds](https://getbelong.com/blog/mutual-funds/tax-on-withdrawal/) explains what to check first. ### 6\. Diversify geographically Overlap within Indian funds cannot be solved only with more Indian funds. Adding exposure to other markets brings genuinely different companies into your portfolio. ## The Overlap Nobody Talks About: Home Country Concentration Most overlap articles focus on stock overlap between Indian funds. There is a bigger overlap many investors miss. If all your funds invest only in India, your entire portfolio shares one economy, one currency and one market cycle. Even with low stock-level overlap, your country-level overlap is total. Our guide on the [risks of investing only in Indian markets](https://getbelong.com/blog/global-investment/risks-of-investing-only-in-indian-markets/) explains why this matters. Our explainer on [global diversification for Indian investors](https://getbelong.com/blog/global-diversification-explained-for-indian-investors-why-your-portfolio-needs-more-than-just-india/) goes further. ### For resident Indians If your salary, home, EPF and mutual funds are all in India, your wealth is highly concentrated in one economy. Global funds hold companies that simply do not appear in Indian fund portfolios. GIFT City offers a way to access USD-denominated global funds. You can explore options like the [DSP Global Equity Fund](https://getbelong.com/tools/gift-city-mutual-funds/dsp-global-equity-fund/) or the [Edelweiss Greater China Equity Fund](https://getbelong.com/tools/gift-city-mutual-funds/edelweiss-greater-china-equity-fund/). These pages help you compare. They are not recommendations. Our guide on [how GIFT City funds complement your portfolio](https://getbelong.com/blog/mutual-funds/gift-city-funds-complement-portfolio/) explains where they fit. ### For NRIs NRIs face the opposite situation. Your income and savings may already sit abroad. Indian funds can add genuinely different exposure. But if you hold several Indian funds, overlap within your India allocation still matters. Our guide on [reducing home country risk](https://getbelong.com/blog/mutual-funds/reduce-home-country-risk/) explains how to think about exposure across countries. For India exposure through GIFT City, you can review funds like the [Tata India Dynamic Equity Fund](https://getbelong.com/tools/gift-city-mutual-funds/tata-india-dynamic-equity-fund/). Another example is the [Sundaram India Mid Cap Fund](https://getbelong.com/tools/gift-city-mutual-funds/sundaram-india-mid-cap-fund-gift/). Check how they overlap with Indian funds you already hold. ## For NRIs Investing in Indian Mutual Funds NRIs often build Indian mutual fund portfolios in stages. A fund started before moving abroad. Another added on a visit home. A third recommended by a relative. Each decision made sense at the time. Together, they can create heavy overlap. ### Consolidate thoughtfully If you hold several overlapping Indian funds, consolidation can simplify tracking and reduce costs. But NRIs should check tax and repatriation implications before selling. Our guide on [how NRIs can buy mutual funds in India](https://getbelong.com/blog/how-to-buy-mutual-funds-in-india-as-an-nri-2026-guide/) covers the account and KYC basics. ### Consider GIFT City and Indian funds together If you invest in both Indian mutual funds and GIFT City funds, check overlap across them too. A GIFT City fund investing in Indian equities may hold companies already in your Indian funds. ### Plan for your return If you plan to return to India, your residency status will change. Your tax treatment may change too. Review overlap and consolidation before that transition, not after. Our [tax filing service](https://getbelong.com/services/tax-filing/) helps NRIs and returning Indians with the tax side of these decisions. ## Three Real-Life Scenarios ### Scenario 1: The six-fund resident portfolio Vikram lives in Bengaluru and runs SIPs in six equity funds. Two large cap funds, two flexi cap funds, an index fund and a mid cap fund. When he checked overlap, his two large cap funds and the index fund shared most of their top holdings. His flexi cap funds were also large-cap heavy. He stopped SIPs in one large cap fund and one flexi cap fund. He redirected that money to his mid cap fund and a global fund. His portfolio now has four funds with clearer roles. ### Scenario 2: The NRI with inherited SIPs Sneha lives in Dubai. She holds Indian funds started before she moved, plus two added on recent visits. Three of her funds turned out to overlap heavily with each other. She paused new investments in two of them and chose one fund to continue. For her non-India exposure, she relies on her UAE savings. For India, she now keeps a small, focused set of funds. ### Scenario 3: The sectoral fund surprise Rahul bought a banking sectoral fund after a strong year for banks. He already held three diversified funds with large bank holdings. His combined exposure to banks became much higher than he intended. When bank stocks corrected, his whole portfolio felt it. He reduced the sectoral fund and kept his diversified funds. His sector exposure is now closer to his comfort level. ## Four Myths About Portfolio Overlap **Myth: More funds always mean more diversification.** Not if the funds hold the same stocks. Diversification depends on what you own, not how many funds you own. **Myth: Funds from different fund houses cannot overlap.** They can, and often do. Large companies appear across many fund houses' portfolios. **Myth: Zero overlap is the goal.** Some overlap in core holdings is natural. The goal is overlap you understand and choose, not zero. **Myth: SEBI's rules have solved overlap for investors.** SEBI's limits apply to specific categories within each fund house. Overlap across your own portfolio is still your responsibility. ## How Often Should You Check for Overlap? For most investors, once a year is enough. [HDFC Mutual Fund](https://www.hdfcfund.com/learn/blog/understanding-portfolio-overlap-mutual-fund-schemes-and-how-reduce-it) suggests reviewing at least annually, or more often for a dynamic strategy. Also check before adding a new fund and after a major market move. A change in fund manager or category is another trigger. SEBI's 2026 recategorisation may itself change some funds' portfolios over the coming months. ## Common Mistakes With Overlap Mistake Why it hurts Better approach Counting funds as diversification Same stocks, many labels Count unique holdings and weights Adding funds based on rankings Duplicates existing exposure Check overlap before adding Holding several large cap funds Heavy overlap by design Keep one large cap or an index fund Ignoring sector concentration Low stock overlap can hide sector risk Check sector weights too Selling quickly to fix overlap Tax and exit load costs Stop SIPs first, then plan Treating overlap as always bad Some core overlap is natural Focus on unintended overlap Ignoring country-level overlap All funds share one economy Consider global exposure ## Overlap and Your SIPs Most Indian investors build portfolios through SIPs. This affects how overlap builds up, and how to fix it. Each new SIP adds money to a fund every month. If two SIPs go into overlapping funds, the duplication grows automatically. The fix is often simple. Redirect SIPs rather than redeeming units. Over time, new money flows to funds with distinct roles, and overlap falls without any selling. This approach avoids immediate tax and exit load costs. It also avoids the temptation to time the market while restructuring. 👉 **Tip:** Treat SIP changes as your main tool for reducing overlap. Redemptions can wait until you have a clear plan. ## Your Decision Guide **If you hold two funds from the same category:** Check their overlap. If it is high, consider keeping only one. **If you hold a large cap fund and a large cap index fund:** Decide whether the active fund adds enough difference to justify its cost. **If you are about to add a new fund:** Compare its top holdings with your existing funds first. Add it only if it fills a clear gap. **If your portfolio is entirely in Indian equities:** Consider whether global exposure fits your goals. This reduces country-level overlap. **If you want to reduce overlap quickly:** Stop new SIPs into duplicated funds first. Plan redemptions after checking tax and exit loads. **If you are an NRI planning to return:** Review overlap and consolidation before your residency status changes. ## Overlap Across Direct Stocks and Funds Many investors hold individual stocks alongside mutual funds. This creates another layer of overlap that fund-to-fund checks miss. Say you own shares of a large company directly, and your funds also hold it. Your total exposure is higher than either view suggests. Add your direct holdings to your overlap review. ## What Happens If You Ignore Overlap? Overlap rarely causes immediate damage. Its cost appears over time and during market stress. You may pay multiple expense ratios for similar exposure. Your returns may drift towards the market average while you pay for active management. A fall in a few large stocks may hit your portfolio harder than you expected. Over years, these small effects add up through [compounding](https://getbelong.com/blog/compounding-meaning/). Higher costs and unintended concentration quietly reduce what your portfolio could have become. There is a reflective point here. Diversification is not about owning more things. It is about owning different things, for different reasons. ## A Macro View: Why SEBI Is Focusing on Overlap Step back and look at the bigger picture. India's mutual fund industry has grown rapidly, and so has the number of schemes. SEBI's 2026 circular aims to keep schemes "true to label". It requires scheme names to match their categories. It limits overlap in sectoral, thematic, value and contra funds, and requires monthly overlap disclosure. For investors, this means more transparency and fewer near-duplicate funds from the same fund house. But it does not replace your own review. Your portfolio's overlap depends on your choices across fund houses. ## Where Overlap Meets Your Investment Plan At [Belong](https://getbelong.com/), we believe good portfolios are built on clear roles, not on the number of funds. Understanding overlap is one of the simplest ways to improve a portfolio without taking more risk. Every fund you hold is an [asset](https://getbelong.com/blog/asset-meaning/) with a job. When two assets do the same job, one is usually redundant. A regular review helps. Our [mutual fund review framework](https://getbelong.com/blog/mutual-funds/review-framework/) offers a structured way to do this each year. If you are deciding between concentrating and spreading, our guide on [a single mutual fund vs a portfolio](https://getbelong.com/blog/mutual-funds/single-mutual-fund-vs-portfolio/) may help. You can browse our [GIFT City mutual funds explorer](https://getbelong.com/tools/gift-city-mutual-funds/) and our [mutual funds platform](https://getbelong.com/products/mutual-funds/) to compare options. Larger investors can review our [GIFT City AIF tool](https://getbelong.com/tools/gift-city-alternative-investment-funds/). To follow early signals for Indian markets, use our [GIFT Nifty tracker](https://getbelong.com/tools/gift-nifty/). For the stable part of a portfolio, NRIs can compare deposits using our [NRI FD rates tool](https://getbelong.com/tools/nri-fd-rates/). If you prefer dollar-denominated savings, explore our [USD fixed deposits](https://getbelong.com/products/usd-fixed-deposits/) through GIFT City. If you invest in individual listings, check whether they duplicate what your funds already hold. This applies to [IPOs](https://getbelong.com/products/ipo/) too. Our explainer on the [GIFT City IPO](https://getbelong.com/blog/ipo/gift-city-ipo/) covers how these listings work. [Futures and options](https://getbelong.com/products/futures-and-options/) are sometimes used to hedge concentrated exposure. They carry leverage and are suitable only for experienced investors who understand the risks. You can review our regulatory credentials on our [licences page](https://getbelong.com/licenses/). Want to check your portfolio's overlap with other investors? Download the [Belong](https://getbelong.com/) app, or join our WhatsApp community. ## Frequently Asked Questions (FAQ) ### What is mutual fund portfolio overlap? It is when two or more of your mutual funds hold the same securities. High overlap means your funds are doing much of the same job, which can concentrate risk. ### How does SEBI calculate portfolio overlap? SEBI's [circular](https://www.sebi.gov.in/legal/circulars/feb-2026/categorization-and-rationalization-of-mutual-fund-schemes_99983.html) takes each stock common to both schemes. For each, it uses the lower weight between the two. The total overlap is the sum of these lower weights. ### How much portfolio overlap is acceptable? There is no official limit for individual investors. SEBI caps overlap at 50% for sectoral and thematic funds against other equity schemes, excluding large cap. Many investors use that as a reference point. ### Can two funds from different fund houses overlap? Yes. SEBI's overlap limits apply within specific categories at fund house level. Funds from different fund houses can still hold the same stocks. ### How do I reduce overlap in my mutual fund portfolio? Give each fund a clear role and keep one fund per role. Stop SIPs into duplicated funds first, then plan redemptions after checking tax and exit loads. ## Sources - SEBI, [Categorization and Rationalization of Mutual Fund Schemes, circular dated February 26, 2026](https://www.sebi.gov.in/legal/circulars/feb-2026/categorization-and-rationalization-of-mutual-fund-schemes_99983.html) - HDFC Mutual Fund, [Understanding portfolio overlap in mutual fund schemes and how to reduce it](https://www.hdfcfund.com/learn/blog/understanding-portfolio-overlap-mutual-fund-schemes-and-how-reduce-it) - Tata Mutual Fund, [SEBI's new mutual fund rules 2026 explained](https://www.tatamutualfund.com/blogs/sebis-new-mutual-fund-rules-2026-explained-know-latest-benefits-and-challenges) ## Disclaimer This article is for general educational purposes only. It is not personalised investment or tax advice. Fund names and examples used are for illustration and are not recommendations. Mutual fund investments are subject to market risks. Read all scheme-related documents carefully. Past performance does not guarantee future results. Regulations, fund portfolios and tax rules change over time. Please verify current rules on the SEBI website and consult a qualified adviser for decisions specific to your situation. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---