Overlapping in mutual fund schemes!

When you are invested in more than 7-10 mutual fund schemes, there is a strong possibility of finding similar stocks across your schemes. Equity mutual fund schemes, especially in the large and flexi cap, have several overlaps in terms of individual stocks. You will always find duplications in large-cap funds. That is why many experts prefer index funds like Nifty 50 & Nifty Next 50 to cover the first 100 stocks by market capitalization. If a flexi-cap has higher weightage of large-cap stocks, then expect overlaps for sure. To avoid overlaps across mutual fund schemes, consult an investment advisor who will give the necessary diversification with right risk reward ratio.