The problem, in plain terms
Many people hold 3-4 equity mutual funds thinking they've spread their money around. Often they have. Often they haven't: the funds look different on paper (different names, different fund houses) but actually hold most of the same companies. You're not getting the diversification you think you paid for, and if the funds charge different fees, you end up paying the pricier one's rate for exposure the cheaper one would've given you anyway.
"Having different fund names isn't the same as having different investments. We found that about 1 in 3 fund pairs we checked actually share a third or more of the same stocks."
The fund's "category" doesn't tell you much
You'd think two funds with the same label (say, two "Flexi Cap" funds) would hold similar stocks, while a "Large Cap" fund and a "Flexi Cap" fund would be different. We checked. It's often the other way around.
Two funds can carry the exact same label and invest in completely different companies. A "Thematic" fund focused on pharma companies and a "Thematic" fund focused on banks share almost nothing, even with an identical label. Meanwhile, funds with different labels often pick from the same short list of big, popular stocks, so they end up holding almost the same thing.
This shows up a lot with tax-saving funds (ELSS). An ELSS fund is often nearly identical to a regular equity fund from the same company. The only real difference is a 3-year lock-in. If you bought an ELSS fund just to save tax, and you also hold another equity fund from that same company, you likely don't have two different bets — you have one bet, split across two funds, each with its own fee, its own exit-load timer, and its own paperwork at tax time.
This doesn't mean anyone did anything wrong
A fund manager who genuinely believes in a set of good companies will naturally end up holding similar stocks across several of their own funds. That's not dishonest, it's just how conviction works. The only real problem is when an investor thinks they've spread their risk and actually haven't. The fix isn't to avoid this, it's to check.
How we check this
We compare what funds actually hold: the real list of stocks and how much money is in each one, not their names or labels. A few rules keep it fair:
- Bigger holdings count more. If a stock is 8% of a fund, sharing it matters more than sharing a stock that's only 0.2% of the fund.
- Same fund house only. We compare a fund house's own funds against each other — the real question is whether one company's fund lineup actually gives you different choices.
- Only actively-managed funds. Index funds are left out — they're supposed to hold the same stocks as each other, so that overlap doesn't mean anything.
- Updated every month. Fund holdings are disclosed monthly, and we recompute everything shortly after each round of disclosures.
One honest caveat: this is a snapshot, not a forecast. Fund holdings change every month, and a new fund manager can change a fund's actual style before its label or category catches up. Use this as a starting point to check your own funds, not a final answer.