How Many Mutual Funds Should You Hold? Expert Explains Portfolio Diversification And Fund Overlap

How many mutual funds should investors have in their portfolios? Holding too many schemes can lead to over-diversification, overlapping investments and subdued returns. In this discussion with Sakshi Batra, Nasser Salim, MD, Flexi Capital, explains why four to six mutual funds may be sufficient for many investors and how a balanced portfolio can combine passive funds, active funds and select thematic investments. The conversation also highlights the importance of checking underlying holdings, avoiding unnecessary investments in new fund offers (NFOs), and reviewing portfolio allocations every six months. Learn how investors can manage mutual fund portfolios more effectively and stay focused on their financial goals.