How similar is the HDFC Flexi Cap Fund to other HDFC equity funds? This question matters because investing in two funds with many common stocks does not double your diversification. The HDFC Flexi Cap Fund overlaps significantly with several other HDFC funds, affecting how much diversification investors actually get.
- HDFC Flexi Cap Fund shares 63.22% of its portfolio with HDFC ELSS - Tax Saver Fund.
- It has a 44.66% overlap with HDFC Value Fund and 43.29% with HDFC Large Cap Fund.
- Overlap with HDFC Small Cap Fund is very low at 3.23%, offering more diversification.
- Portfolio overlap above 40% is considered moderate to high, while above 60% is high.
What is portfolio overlap and why does it matter?
Portfolio overlap measures how many stocks two mutual funds have in common. When two funds hold many of the same companies, owning both does not create two distinct portfolios. This reduces the benefit of diversification, which is important for managing investment risk.
How much does HDFC Flexi Cap Fund overlap with other HDFC funds?
As of September 30, 2026, the HDFC Flexi Cap Fund has the highest overlap with the HDFC ELSS - Tax Saver Fund at 63.22%, which is considered high overlap. It also overlaps 44.66% with the HDFC Value Fund and 43.29% with the HDFC Large Cap Fund, both moderate to high overlaps.
The overlap with the HDFC Dividend Yield Fund is 41.71%, also moderate to high. On the lower side, the Flexi Cap Fund overlaps 38.39% with the HDFC Multi Cap Fund and 34.90% with the HDFC Large & Mid Cap Fund. The overlap with the HDFC Mid Cap Fund is just 10.12%, and with the HDFC Small Cap Fund only 3.23%, indicating these funds provide more unique holdings.
Has the portfolio overlap changed recently?
Between August and September 2026, the overlap between the Flexi Cap Fund and other funds mostly decreased. For example, the overlap with the Large Cap Fund dropped by 0.53 percentage points, and with the Tax Saver Fund by 0.88 points. However, the overlap with the Multi Cap Fund, Pharma and Healthcare Fund, and Focused Fund slightly increased.
There are three pairs of HDFC schemes with over 50% overlap as of September 2026. These include the Flexi Cap Fund and ELSS Tax Saver Fund (63.22%), Focused Fund and Tax Saver Fund (60.99%), and Focused Fund and Flexi Cap Fund (60.12%).
Why does the Flexi Cap Fund overlap more with some funds than others?
The Flexi Cap Fund can invest across large, mid, and small-cap stocks but tends to favor large companies. Therefore, it overlaps more with funds that focus on large caps, like the Large Cap Fund, and less with funds focusing on smaller companies, like the Small Cap Fund.
What does this mean for investors?
Investors should understand that holding both the HDFC Flexi Cap Fund and the Large Cap Fund means owning almost 43% of the same companies. This reduces the diversification benefit. To add genuinely new holdings, investors might consider including funds like the Small Cap or Mid Cap Fund, which have much lower overlap with the Flexi Cap Fund.
Frequently Asked Questions
Q: What is portfolio overlap?
A: Portfolio overlap is the percentage of common stocks held by two mutual funds. A higher overlap means the funds share more of the same companies.
Q: Why is diversification important?
A: Diversification spreads investment risk by holding different assets. If two funds have high overlap, diversification benefits decrease.
Q: Can I invest in both HDFC Flexi Cap and Large Cap Funds?
A: Yes, but be aware that about 43% of the holdings overlap, so diversification is limited. Adding funds with lower overlap can improve diversification.
