ICICI Prudential Nifty 200 Momentum 30 ETF vs Motilal Oswal Nifty 200 Momentum 30 Index Fund

These two funds, ICICI Prudential Nifty 200 Momentum 30 ETF and Motilal Oswal Nifty 200 Momentum 30 Index Fund, are practically mirror images of each other – boasting a 99.95% overlap, ranking them amongst the highest overlap pairs we’ve seen (226 out of 5000). This isn’t surprising given they both track the same Nifty 200 Momentum 30 index. The high overlap is driven by a strong commonality in stock selection, with all 30 stocks held in both.

The finance sector is a major contributor to this overlap, representing over 20% of both portfolios, and stocks like State Bank of India, Shriram Finance, and Bajaj Finance feature prominently in both. Eicher Motors and Hindalco also significantly contribute to the shared holdings. However, Motilal Oswal does hold TVS Motor Company which is absent in the ICICI fund, a minor difference in an otherwise identical portfolio.

Such a high degree of overlap – flagged as ‘high’ by our analysis – means you’re not really diversifying your investment by holding both. You’re essentially doubling down on the same 30 stocks and their performance. While both funds benefit from the momentum strategy, your portfolio’s risk isn’t being spread.

Given this near-total duplication, an investor would be better off choosing one of these funds based on factors like expense ratio or AMC preference, rather than holding both. There’s little to no benefit in owning both, and you’re not achieving the core goal of mutual fund investing: diversification.