Determinants of non-compliant equity funds with EU portfolio concentration limits

•Supervisors should monitor concentrated fund markets with concentrated benchmarks.•The oldest equity funds that are solo-managed should be screened by supervisors.•Supervisors should examine fund holdings on large-cap stocks with low volatility. This study identifies the determinants of domestic equity funds that fail to comply with the portfolio concentration limits of the EU Directive 2009/65/EC. This study also determines the characteristics of the stocks subject to these non-compliant portfolios. The empirical application to a comprehensive sample of domestic equity funds registered in the Eurozone provides significant information that can help to improve market supervision in terms of investors’ protection.