Drishtant's portfolio was a mess in designer packaging

Drishtant believed his mutual fund portfolio was well-structured—balanced, diversified, and stable. To him, it represented thoughtful investing: no risky direct stock picks, just carefully chosen mutual funds aligned with long-term goals.

A product of elite education and privilege, Drishtant had always approached money with a sense of restraint. He wasn’t chasing quick returns. He wanted sustainable wealth—a portfolio that reflected class, not chaos.

But one rainy Saturday in Mumbai, with social plans cancelled, Drishtant found himself with unexpected free time. Curious and slightly restless, he logged into Value Research Online and opened the Portfolio tool. What he found challenged many of his assumptions.

The revelation

He clicked on Portfolio, then Asset Allocation.
And what he saw surprised him.

Across multiple mutual fund schemes, the same stocks kept appearing.

HDFC Bank. Reliance. ICICI Bank.

Not once or twice—but seven times, across seven different funds.

The illusion of diversification quickly unravelled. Despite investing in a range of mutual funds, Drishtant’s portfolio was concentrated in a handful of stocks. The packaging varied, but the underlying holdings were largely the same.

He had assumed his risk was spread out. In reality, it was concentrated. Fund managers across schemes had all selected the same heavyweight companies, creating significant overlap.

The realisation

Drishtant had never directly invested in equities. He believed this shielded him from market volatility and concentration risk. What he hadn’t realised was that mutual funds, though diverse in structure, can still have overlapping exposures.

The Portfolio tool on Value Research provided a transparent breakdown:

• Exact stock-level exposure across funds
• Overlap in holdings between schemes
• Sectoral allocation
• Geographic distribution of investments

He discovered that while he thought he had no foreign exposure, some of his funds had already invested internationally. For instance, one held shares in a Swiss food giant, and another had stakes in a prominent US tech company.

Without knowing it, he had a global footprint. But because he hadn’t reviewed the underlying portfolios, he had missed it.

The wake-up call

What looked like a thoughtfully built portfolio turned out to be repetitive. It had structure on the surface, but not in substance.

The assumption that mutual funds alone guaranteed diversification had been misleading. Even if you don’t buy individual stocks, your exposure to them through mutual funds can still be significant, especially when many schemes hold the same names.

The correction

Once the problem was clear, Drishtant took action. He analysed each fund more closely, identified overlaps, and made informed decisions to streamline his holdings.

He reduced redundancy, adjusted allocations, and ensured that his investments were genuinely diversified across stocks, sectors, and geographies.

The key takeaway? Just because you aren’t buying stocks directly doesn’t mean you aren’t exposed to them. Understanding what your mutual funds hold is not optional—it’s essential.

The outcome

Today, Drishtant has a portfolio that reflects clarity, not assumptions. He knows exactly what he owns, where it’s invested, and how each scheme complements the other.

Whether he’s pitching to a future employer or planning for long-term goals, he now has data and insight to support his decisions.

The lesson

Many investors assume diversification by simply owning multiple mutual funds. But unless you examine the underlying holdings, you may be duplicating risk rather than distributing it.

Tools like the Portfolio section on Value Research can help you see beyond the surface, revealing where your money is really going and whether your strategy aligns with your goals.

Don’t rely on perception.
Rely on data.
Click. Think. Invest. Repeat.

Because a real portfolio, like real power, starts when you finally stop outsourcing your common sense.

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This article was originally published on May 29, 2025.