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Tata Capital > Blog > Wealth Services > How many mutual funds should you hold?

ಸಂಪತ್ತು ಸೇವೆಗಳು

ನೀವು ಎಷ್ಟು ಮ್ಯೂಚುಯಲ್ ಫಂಡ್‌ಗಳನ್ನು ಹೊಂದಿರಬೇಕು?

How many mutual funds should you hold?

Today, mutual funds are one of the most popular investment avenues for Indian investors. They offer diversification, professional fund management, liquidity, and access to different asset classes. 

If you’re into mutual fund investments, you must have heard investment experts advising on maintaining a diversified mutual fund portfolio. Diversification helps to protect you from sudden risks. However, in the attempt to diversify, investors often hold too many funds without realizing that it is not improving their returns but instead harming them. 

Holding excessive mutual funds can result in overlap, confusion, and unnecessary effort in portfolio tracking. It is vital to understand what an ideal mutual fund portfolio is based on your financial goals, risk tolerance, and investment horizon. 

Why do you invest in too many mutual funds?

The most common reasons why you accumulate too many mutual funds in your portfolio are:

Over-diversification

Diversification helps to spread risk. However, if you allocate money to multiple funds, your returns won’t be that great even if one of them does very well. You must learn how to diversify a mutual fund portfolio before taking action. Adding funds beyond a certain point does not reduce risk. It creates complexity without adding meaningful diversification. 

Recommendations from various sources

It is common for investors to make investments based on the suggestions of family, friends, colleagues, and even distributors. If you follow this approach, you can end up adding funds without reviewing your existing portfolio. 

Following market trends

When a specific category, such as small-cap or sectoral funds, performs well, you may add new funds to chase recent returns, which can result in overlap and unnecessary risk.

Lack of periodic review

If you don’t review your portfolio periodically, old Systematic Investment Plans (SIPs) and lump-sum investments continue running even when goals change or new funds are added. This results in a cluttered portfolio. 

ಇದನ್ನೂ ಓದಿ –ವೆಲ್ತ್ ಮ್ಯಾನೇಜರ್ ಹೊಂದಿರುವುದು ಎಲ್ಲರಿಗೂ ಏಕೆ ಅರ್ಥಪೂರ್ಣವಾಗಿದೆ?

Why shouldn’t you invest in too many mutual funds?

ಭಾರತದಲ್ಲಿ ಮ್ಯೂಚುಯಲ್ ಫಂಡ್‌ಗಳಲ್ಲಿ ಯಾವುದೇ ವ್ಯಾಖ್ಯಾನಿತ ಗರಿಷ್ಠ ಹೂಡಿಕೆ ಮಿತಿ ಇಲ್ಲದಿದ್ದರೂ, ಅದು ಏಕೆ ಹೆಚ್ಚು ಇರಬಾರದು ಎಂಬುದಕ್ಕೆ ಕಾರಣಗಳಿವೆ.

ಸ್ಪಷ್ಟತೆ ಮತ್ತು ನಿಯಂತ್ರಣದ ಕೊರತೆ

ಅನೇಕ ಫಂಡ್‌ಗಳನ್ನು ನಿರ್ವಹಿಸುವುದು, ರಿವ್ಯೂ ಮಾಡುವುದು ಮತ್ತು ಟ್ರ್ಯಾಕ್ ಮಾಡುವುದು ಕಷ್ಟ. ಯಾವ ಫಂಡ್‌ಗಳು ಉತ್ತಮವಾಗಿ ಕಾರ್ಯನಿರ್ವಹಿಸುತ್ತಿವೆ, ಪ್ರತಿಯೊಂದೂ ಗುರಿಗಳೊಂದಿಗೆ ಹೇಗೆ ಹೊಂದಿಕೊಳ್ಳುತ್ತದೆ ಅಥವಾ ಸೂಕ್ತ ಅಸೆಟ್ ಹಂಚಿಕೆಯನ್ನು ಸಾಧಿಸಲಾಗಿದೆಯೇ ಎಂಬುದನ್ನು ನೀವು ಕಳೆದುಕೊಳ್ಳಬಹುದು.

ಪೋರ್ಟ್‌ಫೋಲಿಯೋ ಓವರ್‌ಲ್ಯಾಪ್

ಇಕ್ವಿಟಿ ಫಂಡ್‌ಗಳು ಸಾಮಾನ್ಯವಾಗಿ ಅದೇ ಜನಪ್ರಿಯ ಸ್ಟಾಕ್‌ಗಳಲ್ಲಿ ಹೂಡಿಕೆ ಮಾಡುತ್ತವೆ. ಅನೇಕ ಫಂಡ್‌ಗಳನ್ನು ಹೊಂದಿರುವುದರಿಂದ ನಕಲು ಹೆಚ್ಚಾಗುತ್ತದೆ. ಇದಲ್ಲದೆ, ನೀವು ಮ್ಯೂಚುಯಲ್ ಫಂಡ್ ಅನ್ನು ಸಮರ್ಥವಾಗಿ ಹೋಲಿಕೆ ಮಾಡದಿದ್ದರೆ, ಅದು ವೈವಿಧ್ಯತೆಯ ಪ್ರಯೋಜನಗಳನ್ನು ಕಡಿಮೆ ಮಾಡಬಹುದು ಮತ್ತು ಅಪಾಯವನ್ನು ಹೆಚ್ಚಿಸಬಹುದು.

Higher costs

Although mutual funds are relatively low-cost, expense ratios still apply. If you hold several actively managed funds, your overall cost structure may be higher than required.

Complicated rebalancing

Rebalancing is crucial for maintaining your risk level. With too many funds, adjusting your portfolio becomes unnecessarily complex and time-consuming. 

ಇದನ್ನೂ ಓದಿ –ನ್ಯಾಯೋಚಿತ ಮಾರುಕಟ್ಟೆ ಮೌಲ್ಯ - ಅರ್ಥ ಮತ್ತು ಅದನ್ನು ಲೆಕ್ಕ ಹಾಕುವುದು ಹೇಗೆ

What is the ideal number of mutual funds that you may hold?

There isn’t a universal number that fits every investor, but one principle is almost always true: a compact, well-constructed portfolio works far better than a scattered one. Holding too many funds often leads to unnecessary overlap, diluted returns, and a portfolio that becomes difficult to monitor. Even if some funds perform well, the impact may barely show because your investments are spread too thin.

Many experienced investors eventually streamline their portfolios once they realise that clarity and purpose matter more than quantity. A mix of diversified equity funds, exposure to different investment style, and a tactical allocation to thematic or global markets can offer broad diversification without clutter. One can also add some allocation to commodities like gold or silver, to hedge the portfolio and debt to keep the portfolio stable.

What really matters is that each fund in your portfolio serves a distinct role. If two funds follow similar strategies or invest in the same part of the market, keeping both doesn’t improve diversification. True diversification comes from choosing funds that complement each other, not repeat each other.

ತೀರ್ಮಾನ

The ideal number of mutual funds for you ultimately depends on:

  • Your risk appetite: Higher-risk investors may hold more growth-oriented funds, while conservative investors may prefer stability-focused funds.
  • Your asset allocation: Your mix of equity, debt, gold, and international exposure should guide how many funds fit into each bucket.
  • Your investment horizon: Longer horizons allow for more equity-oriented funds, whereas shorter timelines require simpler, lower-volatility combinations including Debt or Hybrid oriented funds.

ಸಾಮಾನ್ಯ ಪ್ರಶ್ನೆಗಳು

ಅನೇಕ ಮ್ಯೂಚುಯಲ್ ಫಂಡ್‌ಗಳಲ್ಲಿ ಹೂಡಿಕೆ ಮಾಡುವುದು ಅಪಾಯವೇ?

It is not necessarily risky to invest in several mutual funds, but holding too many of them can lead to excessive overlap and diluted returns. How many SIPs should I have? You can have multiple SIPs, but you must try to link them to different goals or fund categories. If you have many SIPs across similar funds, consolidate them.

ಉತ್ತಮ ವೈವಿಧ್ಯೀಕರಣಕ್ಕಾಗಿ ನಾನು ಹೆಚ್ಚಿನ ಫಂಡ್‌ಗಳಲ್ಲಿ ಹೂಡಿಕೆ ಮಾಡಬೇಕೇ?

ವೈವಿಧ್ಯೀಕರಣವು ಒಂದು ನಿರ್ದಿಷ್ಟ ಹಂತದ ನಂತರ ಮೌಲ್ಯವನ್ನು ಸೇರಿಸುವುದನ್ನು ನಿಲ್ಲಿಸುತ್ತದೆ. ಸಮತೋಲಿತ ಪೋರ್ಟ್‌ಫೋಲಿಯೋವನ್ನು ನಿರ್ಮಿಸಲು, ಹೆಚ್ಚಿನ ಹಣವನ್ನು ಸೇರಿಸುವ ಬದಲು ವಿವಿಧ ವರ್ಗಗಳಲ್ಲಿ ಕೆಲವು ಉತ್ತಮ ಫಂಡ್‌ಗಳನ್ನು ಆಯ್ಕೆ ಮಾಡುವ ಮೇಲೆ ನೀವು ಗಮನಹರಿಸಬೇಕು.

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