Fund overlap occurs when two or more funds in your portfolio hold the same underlying securities. While owning multiple funds may feel diversified, significant overlap means you are concentrating your exposure in the same stocks or bonds rather than spreading risk across distinct investments. This is especially common when holding multiple large-cap U.S. equity funds, which tend to have substantial overlap in their top holdings.

This calculator uses the Jaccard index to measure overall overlap, which divides the number of shared holdings by the total number of unique holdings across both funds. It also shows overlap as a percentage of each individual fund's holdings, which helps you understand how much of each fund is duplicated. For example, if Fund A has 500 holdings and 120 are shared with Fund B, then 24% of Fund A's holdings overlap.

The diversification efficiency metric shows what percentage of your combined holdings are truly unique. A diversification efficiency of 100% means zero overlap and maximum diversification, while lower values indicate increasing redundancy. If you discover high overlap between two funds, consider whether both are necessary or whether consolidating into one fund or replacing one with a fund targeting a different market segment would improve your portfolio's risk-adjusted returns.