Portfolio Management
· Last reviewed July 2026Portfolio Diversification Calculator
Check if your mutual fund portfolio is properly diversified. Enter your fund types and allocation to get a diversification score, HHI, asset class breakdown, and actionable suggestions. Free India tool.
Your Portfolio Holdings
Total: 100% ✓
Diversification Score
9/10
HHI: 27% · Avg ER: 0.91%
Equity
80%
Debt
15%
Gold
5%
Avg Exp Ratio
0.91%
Portfolio Health Dimensions
Get this calculated on your actual portfolio
Your real diversification score — calculated from actual holdings in your CAS statement — is available in FundSageAI's portfolio analysis dashboard.
What is Portfolio Diversification Calculator?
The Portfolio Diversification Calculator measures how well-diversified your mutual fund portfolio is using quantitative metrics including the Herfindahl-Hirschman Index (HHI), asset class distribution, and expense ratio efficiency. It scores your portfolio on key diversification dimensions and suggests specific improvements: too much equity concentration, missing debt allocation, zero gold exposure, or an overly expensive fund mix. Proper diversification doesn't mean holding many funds — it means holding the right balance of uncorrelated assets (equity, debt, gold) in proportions appropriate for your risk profile.
How to use this tool
Select the fund category (Large Cap Index, Mid Cap, Debt Fund, Gold Fund, etc.) for each holding.
Enter the allocation percentage for each fund — these should sum to 100%.
View your Diversification Score (0–10), HHI, asset class breakdown, and average expense ratio.
Read the specific suggestions section for actionable improvements.
The Formula
HHI = Σ (weight_i²) for each fund Diversification Score = (1 - HHI) × 10 Asset allocation breakdown: - Equity: Large Cap, Mid Cap, Small Cap, Flexi/Multi Cap, ELSS, Index, International - Debt: Debt Fund, Liquid/Overnight - Gold: Gold Fund - Hybrid: BAF/Balanced Avg Expense Ratio = Σ (weight_i × estimated ER for category)
Key Terms
- Diversification
- Spreading investments across different asset classes, fund categories, and securities to reduce the impact of any single investment's poor performance on the overall portfolio.
- HHI (Herfindahl-Hirschman Index)
- Sum of squared market share weights of each holding. Ranges from near 0 (perfect diversification) to 1.0 (100% in one fund). Below 0.25 is considered well-diversified.
- Correlation
- The degree to which different assets move together. Low or negative correlation between assets (e.g., equity and gold) reduces portfolio risk through diversification.
- Asset Class
- A broad category of investment with similar characteristics: Equity (ownership), Debt (lending), Gold (commodity hedge), and Liquid/Cash (stability).
Key Benefits
- ✓Quantifies diversification with HHI — a metric used by economists and institutional fund managers.
- ✓Identifies specific gaps: missing debt, over-weight small cap, no gold allocation.
- ✓Estimates average expense ratio based on fund categories — flags high-cost portfolios.
- ✓Suggestions are specific and actionable, not generic advice.
Practical Example
Portfolio: 40% Large Cap Index + 25% Mid Cap + 15% Small Cap + 15% Debt + 5% Gold Diversification Score: 9.1/10 HHI: 8.9% (low = good) Equity: 80% | Debt: 15% | Gold: 5% Avg ER: 0.72% Suggestion: Small cap at 15% is acceptable, but monitor closely.
FundSageAI Dashboard
Do more with your real portfolio data
- 1Actual diversification score from CAS data
- 2Stock-level overlap matrix across all funds
- 3Automated rebalancing suggestions
Related Reading
Common Questions
Frequently Asked Questions
You might also like
Free · No credit card · 2 min setup
These calculators use assumptions.
Your portfolio uses facts.
Upload your CAMS or KFintech CAS statement to get real XIRR, true corpus values, actual fund overlap, and personalised insights — all pre-filled with your data.