🏏 The Captain’s Favourites
The captain had 50 players available.
Fifty.
Enough talent to build five different teams.
But every time the big match came around, he kept looking at the same few names.
The same opener.
The same all-rounder.
The same two bowlers.
Everyone in the dressing room knew who was getting picked.
Again.
And again.
And again.
One day, the 12th Man looked at the selection sheet and laughed.
“Captain... baaki 46 players ko sirf attendance ke liye bulaate ho kya?” 😂
The captain smiled.
“Not exactly.
I just trust these players more.”
And suddenly, the team sheet told a very different story.
It wasn't about how many players the captain had.
It was about how much he relied on a few of them.
🏏 Welcome to THE 12TH MAN — EPISODE 008
In our cricket universe:
The Captain = Fund Manager
The Playing XI = Portfolio
A mutual fund may hold 50, 60 or even 100 stocks.
But look closer.
How much of the portfolio is sitting in the captain's favourites?
Maybe the top 5 stocks carry a huge part of the team.
Maybe the top 10 dominate the scorecard.
Maybe one stock has become the captain's biggest bet.
That's portfolio concentration.
And this is where things get interesting.
A portfolio with many stocks isn't automatically diversified.
Because 50 players don't mean 50 equal opportunities.
If the captain keeps giving the ball to the same few...
those few are carrying the match.
Gajamudra lets you look inside that Playing XI — including Top-5, Top-10, Top-20 weight, largest position, HHI and Gini-based conviction measures. (Gajamudra)
The question isn't:
“How many stocks does my fund own?”
It's:
“How much does my fund depend on its favourites?”
And that can be a much more interesting question.
🏏 The 12th Man Rule:
Don't count the players.
Watch who gets the ball.
Next Monday...
The captain has his favourites.
But what happens when everyone starts picking the same player?
Episode 009 — The Player Everyone Wants.
Because sometimes, the biggest crowd isn't inside one team.
It's spread across the entire league.
Over to the Dressing Room
Pick one fund.
Look at its Top 5.
How much of the team depends on them?
That's where the real story begins.
Beyond Returns.
Understand What You Own.
FAQs — Episode 008
1. How do I check the concentration of a mutual fund portfolio?
You can start by looking at the fund's Top 5, Top 10 and Top 20 holdings and the percentage of the portfolio they represent. A larger share concentrated in the biggest positions generally indicates a more concentrated portfolio. Gajamudra also uses Gini, HHI, maximum position and high-conviction bets for a deeper view.
2. What does Top 5 holding weight mean in a mutual fund?
Top 5 holding weight is the combined percentage of the portfolio invested in its five largest holdings. It gives investors a quick way to see how heavily a fund depends on its biggest positions.
3. Is a mutual fund with 50 stocks necessarily well diversified?
No. The number of holdings alone doesn't tell the whole story. A fund can hold many stocks while still having a large portion of its assets concentrated in a small number of positions or sectors.
4. What is HHI in mutual fund portfolio analysis?
HHI (Herfindahl-Hirschman Index) measures how concentrated the weights of holdings are. It is calculated from the squared position weights, so a higher HHI indicates that portfolio weight is concentrated among fewer holdings.
5. What does Gini coefficient mean in a mutual fund portfolio?
The Gini coefficient measures inequality in position weights. A low value means holdings have relatively similar weights, while a high value indicates that a few positions carry much more weight than others. Gajamudra uses Gini as one of its primary conviction metrics.
6. Can two mutual funds with the same number of stocks have different concentration?
Yes. Two funds might each hold 50 stocks but assign very different weights to those stocks. One may spread its portfolio relatively evenly, while another may put a much larger share into its top positions. That is why holding count should be viewed alongside position weights.
7. Can a mutual fund be concentrated in a sector even if it owns many stocks?
Yes. Concentration can occur at both the stock and sector/industry level. A fund may own many individual companies while still having significant exposure to one particular sector, increasing its sensitivity to events affecting that sector.
8. Why should I look at a mutual fund's Top 10 holdings?
The Top 10 can reveal where a meaningful portion of the fund's capital is actually placed. Looking beyond the number of stocks can help investors understand whether the manager is spreading exposure broadly or placing stronger bets on a smaller group of companies.
9. Does portfolio concentration tell me which stocks a fund manager has the most conviction in?
It can provide a useful signal of conviction, particularly when combined with metrics such as maximum position, Top-5 weight, Gini, HHI and high-conviction bets. However, concentration by itself does not explain why a manager owns a stock or whether that position will perform well.
10. How can I compare concentration between two mutual funds?
Compare the funds using the same measures—for example, Top-5 weight, Top-10 weight, HHI, Gini and largest position. Looking at several measures gives a better picture than relying only on the number of holdings. Gajamudra provides these concentration and conviction measures from disclosed portfolio holdings.