Topics to discuss:

  • What do we actually mean by overlap in mutual funds?
  • How is over-diversification different from overlap? Is it the same thing?Why do investors feel that adding more funds leads to more returns?
  • If a particular market cap (like midcap or small cap) is performing well and investors add multiple funds from that category, how can that backfire?
  • How does overlapping actually curtail returns and reduce profit in a portfolio?
  • How can investors check whether their portfolio is overlapping or not?
  • What methods or strategies can investors use to identify overlap?
  • What degree of overlap is acceptable, and how much overlap is a strict no requiring exit from a fund?
  • If another fund in the same category has better exposure or strategy, should investors exit the existing one and buy the better-performing one? How should they decide?

Watch Is Your Portfolio Truly Diversified? Here’s a few finance tips on YouTube.

by Amit Kukreja