How many mutual fund schemes should be present in a proper portfolio?
Shivani Chugh13 February, 2019
The number of schemes in a portfolio depends on the requirement and investment objective of the investor.
If a particular fund can achieve a certain short term goal than one or two schemes are enough.
For long term goals, investing in different categories of schemes is recommended most of the time as in the long duration the market conditions can be different for every category.
Investing in multiple schemes of the same category does not help while over-diversifying the portfolio will restrict growth.
For me, I have chosen 5 schemes in my portfolio and they bring a great balance of risk and reward to my portfolio.
Mrigank Vastav02 July, 2018
How many schemes would be in the investor’s portfolio depends upon how many schemes you can manage and track regularly. Instead of concerning about the number of schemes, you must be more concerned about the selection of scheme that is in line with your risk, tenure and investment goal. Investors should avoid investing in a large number of schemes which has invested in similar stocks. Ideally, an investor can have 5-6 schemes in their portfolio across categories for diversification.