DSP Nifty Top 10 Equal Weight ETF vs DSP Nifty Top 10 Equal Weight Index Fund

These two DSP funds – the Top 10 Equal Weight Index Fund and its ETF version – are almost mirror images of each other, registering a very high 99.78% overlap (ranking in the top 1% of all 5000 fund pairs we’ve analysed). This isn’t surprising, as both track the same underlying index. The substantial overlap is driven by a heavy concentration in the banking sector, accounting for over 43% of both portfolios.

Key stocks like Axis Bank, Larsen & Toubro, ICICI Bank, Kotak Mahindra Bank and HDFC Bank are major contributors to this similarity, holding nearly identical weights in both funds. Essentially, you’re getting the same portfolio exposure regardless of which one you choose. There are no significant holdings unique to either fund.

However, the way you access this portfolio differs. The Index Fund will likely have slightly higher expenses due to active management (even if minimal for an index fund), while the ETF offers the flexibility of trading on an exchange. This difference in structure is the primary distinction.

With such a high degree of overlap, adding both to your portfolio offers minimal diversification benefit. You’re essentially doubling down on the same bets. Consider if you truly need both, or if one – chosen based on cost and preferred investment method – is sufficient.