Too Many SIPs? 6 Funds Can Beat 20 Every Time
Most Indians think owning more mutual funds means better safety. Experts say 3 to 6 well-chosen funds across large, mid, small-cap, and debt categories is enough to build a strong, trackable portfolio without overlap.
Owning 20 mutual funds is like ordering every dish at a restaurant — you still get the same nutrients, just more confusion and a bigger bill.
More than this in your portfolio and you're probably hurting your returns
Key Takeaways
List all your current mutual fund SIPs and check how many fall in the same category — large, mid, or small-cap — using platforms like Kuvera or MF Central.
Use a free portfolio overlap tool (available on ValueResearch or Morningstar India) to identify if two or more of your funds hold 40%+ of the same stocks.
Consolidate redundant funds gradually by stopping SIPs in overlapping schemes and redirecting that amount into one stronger fund in that category.
Most Indians think owning more mutual funds means better safety. Experts say 3 to 6 well-chosen funds across large, mid, small-cap, and debt categories is enough to build a strong, trackable portfolio without overlap.
Here's what happened: Financial experts recommend holding just 3 to 6 mutual funds to achieve meaningful diversification without unnecessary complexity or fund overlap.. Owning too many funds — especially in the same category — causes 'portfolio overlap', where multiple funds hold the same underlying stocks, adding no real diversification benefit.. A balanced mix of large-cap, mid-cap, small-cap, and one debt fund covers most risk-return combinations for a typical Indian salaried investor..
What you should do: List all your current mutual fund SIPs and check how many fall in the same category — large, mid, or small-cap — using platforms like Kuvera or MF Central.. Use a free portfolio overlap tool (available on ValueResearch or Morningstar India) to identify if two or more of your funds hold 40%+ of the same stocks.. Consolidate redundant funds gradually by stopping SIPs in overlapping schemes and redirecting that amount into one stronger fund in that category..
One index fund tracking Nifty 50 + one mid-cap active fund + one small-cap fund + one debt fund covers 90% of what most Indian retail investors actually need.
Review Your SIP Portfolio
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- [1]“How many mutual funds should you own? Experts explain the right portfolio mix” mint - money · 8 Jul 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.