A portfolio with too many mutual funds runs the risk of mirroring the broader market and thus losing the ability to beat it. If your portfolio simply replicates the market average, you may largely get similar returns, with significantly lower management fees, by simply buying a single Nifty 50 or Sensex index fund. “When you hold too many equity funds, your portfolio starts to resemble the broader market. As a result, it blunts the portfolio’s ability to outperform the broader market,” said Ankur Punj, managing director and business head, Equirus Wealth.
