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

DSP Nifty Top 10 Equal Weight ETF and Kotak Nifty Top 10 Equal Weight Index Fund are almost mirror images of each other – with a 99.5% overlap, ranking in the top 30% of all fund pairs we’ve analysed (pair_rank 1498 of 5000). This isn’t surprising, as both track the same underlying index. The high overlap is overwhelmingly driven by a large concentration in the top 10 companies of the Nifty 50.

The biggest contributor to this similarity is the Banks sector, accounting for over 43% of the shared holdings. Axis Bank, ICICI Bank, HDFC Bank, and Kotak Mahindra Bank are key stocks driving this overlap, with very little difference in their weights across both funds. Larsen & Toubro is another significant common holding. Essentially, you’re getting the same portfolio, just packaged slightly differently.

Interestingly, both funds have no unique holdings. This is typical for index funds, but it highlights the lack of any active divergence. While both AMCs (DSP and Kotak) are reputable, the investment strategy is identical. This extreme similarity means you aren’t gaining any diversification benefit by holding both.

With such a high overlap, you’re essentially doubling down on the same bets. Consider if you need both funds – the diversification risk is substantial. If you already hold one, adding the other won’t meaningfully reduce your portfolio risk and will only increase your expense ratio.