The Illusion of Diversification
A common mistake among Indian mutual fund investors is holding 8 to 15 different funds across multiple AMCs under the belief that more schemes equate to lower risk. In reality, multiple Large Cap, Flexi Cap, and Multi Cap funds often own the exact same blue-chip stocks in similar weights.
1. Identifying Hidden Portfolio Redundancies
When you hold three funds that each allocate 8-10% of their capital to HDFC Bank, ICICI Bank, and Reliance Industries, your effective portfolio concentration spikes. Rather than mitigating risk, you amplify vulnerability to specific large-cap drawdowns.
2. How MyPlexus Overlap Analyzer Works
With the MyPlexus Portfolio Overlap Engine, you simply upload your CAS or select schemes to generate an interactive pairwise overlap matrix and identify redundant positions.
3. Streamlining Your Portfolio to 4-5 Core Funds
Most long-term goals can be managed with 3 to 5 non-overlapping funds: a core flexi-cap fund, a disciplined mid-cap allocation, a small-cap fund for alpha, and high-quality debt buffers.
