What is fund overlap?
Many investors hold three or four equity funds to feel diversified. But if those funds own mostly the same stocks, the portfolio is far less diversified than the number of funds suggests. Fund overlap puts a percentage on that: the share of the two portfolios that is the same holdings.
A 60% overlap means that about 60% of the money in one fund sits in stocks the other also holds. Owning both is then closer to owning the same fund twice, and you pay two expense ratios for it.
The overlap bands
Punji reads overlap in four bands, from “keep both” to “exit one”:
| Overlap | Band | What to do |
|---|---|---|
| 70%+ | Near Clones (70%+) | Exit immediately - switch to the lower-cost option |
| 50-70% | Effective Duplicates (50-70%) | Consolidate - treat as duplicates, exit the weaker/costlier option |
| 30-50% | Moderate Overlap (30-50%) | Review - stop adding new capital, pick one to direct future SIPs |
| < 30% | Distinct Funds (<30%) | Keep both |
Real overlap, July 2026
Across 8,063 pairs of funds from the same fund house, the typical pair shares 21% of its portfolio. About 1 in 3 pairs shares a third or more, and 1 in 29 is basically the same fund. The three most overlapping pairs in the latest monitor:
| Fund house | Fund A | Fund B | Overlap |
|---|---|---|---|
| Sundaram Mutual Fund | ELSS Tax Saver Fund (Regular Growth) | Flexicap Fund (Regular Growth) | 99.3% |
| Quantum Mutual Fund | Value Fund (Regular Growth) | ELSS Tax Saver Fund (Regular Growth) | 98.6% |
| SBI Mutual Fund | Retirement Benefit Fund - Aggressive Hybrid Plan - Regular Plan (Growth) | Retirement Benefit Fund - Aggressive Plan - Regular Plan (Growth) | 98.0% |
Overlap this high within a single fund house usually means two differently named funds follow nearly the same strategy. These are same-AMC pairs; a real portfolio mixes fund houses, so check your own combination.
What a high overlap tells you
All 3 of the top pairs above sit in the near-clone band of 70% or more. Funds that overlap this much differ in name and category label but not in what they own, so two funds with the same stocks will behave almost identically in a rising or a falling market. The extra fund adds a second set of fees without adding a second set of ideas.
Overlap can be highest when funds share a strategy and a stock universe, for example two flexi cap style funds from the same house. It is lower between funds from different parts of the market, such as a large cap fund and a small cap fund.
How to check your own funds
- List the equity funds you hold, including tax-saving funds, since they often hold the same large stocks.
- Check the overlap of each pair using the latest portfolio disclosure.
- Where two funds sit in the duplicate or near-clone bands, keep the lower-cost one.
- Recheck after each monthly disclosure, because portfolios change.
Overlap and active share
Overlap compares two funds with each other. Active share compares one fund with its benchmark. A fund can have low overlap with your other funds yet still be a near copy of the index, which is why both are worth checking. Higher cost is the price of difference, so look at the expense ratio too.
See the monthly Fund Overlap Monitor and the overlap guide for the full detail and how to check your own funds.
WHAT THIS MEANS FOR YOU More funds do not mean more diversification. If two funds overlap heavily, keep the cheaper one and direct new SIPs there. Overlap is a snapshot, since portfolios change monthly, so recheck after each disclosure.
METHODOLOGY Overlap is the share of two funds’ holdings that are the same stocks, computed from monthly portfolio disclosures for July 2026, across pairs of funds from the same fund house. Bands follow Punji’s overlap severity scale. Not investment advice.