What does holding overlap mean?
Holding overlap arises when an investor possesses the same shares across multiple holdings.
For example, consider Mr. Mani, a Fyers client. He has invested ₹1,00,000 in the Franklin India Technology Mutual Fund and simultaneously holds TCS stocks worth ₹1,00,000. Notably, the Franklin India Technology Mutual Fund carries a notable 14% weightage of TCS shares. Thus, Mr. Mani's investment scenario presents a holding overlap, with TCS shares amounting to ₹1,14,000.
Whilst minor overlaps can be anticipated, excessive holding overlaps might expose the investor to augmented risk levels. This can adversely affect portfolio returns when set against a benchmark.
For retail investors, comprehending individual fund holdings can be intricate. This is where the Portfolio Analyzer's 'Holding Overlap' section becomes pivotal. It grants insights into risk concentration within your holdings, assisting in making informed decisions on portfolio diversification.
In the demonstrated image, the 'Holding Overlap' feature showcases the combined weightage of the top 10 scrips in the portfolio. Evidently, Bharti Airtel Ltd. has the most substantial concentration. Leveraging this data, investors can deliberate on enhancing their portfolio diversity.
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