Is my mutual fund portfolio overdiversified?

I have invested Rs 1,000 in ELSSs: DSP BlackRock (for lifetime), Rs 1,000 in L&T Tax Advantage Fund (for 5 years). And another Rs 2,000 in L&T Emerging Businesses Fund (for 2 years) and Rs 2,000 in Motilal Oswal MOSt Focused Multicap 35 Fund (for 3 years). Is my portfolio too much diversified? And how is my mutual fund selection?
--Satyam Shukla

To begin with, we would not be able to comment on your fund selection or portfolio because of insufficient information provided by you. Your schemes/portfolio should be in line with your goals, investment period and risk profile. You have not provided these details. Here are a few quick observations:

One, you should invest in equity mutual fund schemes only if you have an investment horizon of five to seven years. For midcap and smallcap schemes, you should have a slightly higher horizon of at least seven to 10 years. We can see that you are investing in L&T Emerging Businesses Fund and Mostilal Oswal MOSt Focused Multicap 35 Fund for a horizon of less than three years. This can be extremely risky.


Two, if you have an investment horizon of less than five years, you should opt for debt mutual fund schemes.