There is a constant urge to earn more, which is why many people tend to invest more. This behaviour also prompts many of them to put their money into too many money-making opportunities. Typically, retail investors begin their journey by initiating systematic investment plans (SIPs) in two to three fundamental equity or debt mutual fund schemes. As time progresses, they may choose to diversify by including additional categories of funds or exploring new fund offers (NFOs) that catch their interest. They discover schemes that excel in performance and invest in them while retaining their existing mutual fund holdings due to sentiment and attachment.
For experienced investors, maintaining an excessive number of mutual fund holdings can pose challenges, despite its apparent paradox. Although diversification is typically beneficial, an excessive number of funds can complicate portfolio management and hinder the attainment of investment objectives. Having too many mutual fund holdings can be a problem owing to…
