HDFC NIFTY200 MOMENTUM 30 INDEX FUND vs ICICI Prudential Nifty 200 Momentum 30 ETF

HDFC Nifty200 Momentum 30 and ICICI Prudential Nifty 200 Momentum 30 are almost mirror images of each other – with a 99.91% overlap, ranking 473rd out of 5000 fund pairs we’ve analysed. This isn’t surprising, as both aim to replicate the same Nifty 200 Momentum 30 index. The high overlap isn’t due to clever stock picking, but simply following the same ruleset.

The biggest driver of this near-total overlap is a heavy concentration in the Finance sector (over 20% combined), with stocks like State Bank of India, Shriram Finance, and Bajaj Finance featuring prominently in both portfolios with identical weights. Eicher Motors and Hindalco also contribute significantly to the shared holdings. Essentially, what one fund does, the other must do.

However, the practical difference lies in the expense ratios and tracking error – which aren’t reflected in this overlap analysis. Both funds have no unique holdings, meaning there’s zero diversification benefit from owning both. This is a very high overlap level, and you’re essentially paying twice for the same exposure.

For investors, this highlights the importance of looking beyond just fund category. Holding both these funds offers no diversification and is redundant. Choose one based on cost and other factors, but don’t fall into the trap of thinking more funds automatically mean better diversification.