Is it okay to invest in 12 different mutual fund schemes?

I am currently investing in 12 different funds. Is it ok to invest in too many funds or should I limit my investment to a few funds.

- Vedavyas Paruchuri

Most investment experts ask investors to keep the total number of schemes low (maximum four to six) because they think too many schemes would complicate matters for regular investors. They also believe that too many schemes in the same category would not often offer diversification because there could be overlapping in the portfolios. Also, too much diversification across too many categories might result in lower overall returns from the mutual fund portfolio.

You have not mentioned your total investment or the details of the schemes you are investing. Therefore, it is not possible to offer a personalised advice. We only offer you some pointers. Do you have too many schemes within the same category. If so, check the portfolio of the schemes. If you see too many common stocks, you should know that these schemes are not offering you meaningful diversification.


Second, are you able to keep track of their performance and review your portfolio at regular intervals without any trouble. If yes, you can hold on to the schemes. However, you think you are not able to monitor them effectively, you should try to prune your portfolio. Please do not add more schemes to your portfolio.