How many Funds should you Hold?

Buying too many funds reduces your portfolio an to an index, sacrificing the rewards of active management. Tracking and managing them also becomes difficult. On the other hand, investing in a single fund exposes you to various types of risk. Your fund manager may perform poorly or he might leave. The fund house’s quality may deteriorate. So how many is too many?

How many funds should you hold?

Here are the different types of funds you can invest in your different types of goals

Balanced Funds
Diversified Equity Funds
  • ICICI Prudential Value Discovery Fund (G)
  • UTI MNC Fund
Equity Linked Savings Scheme
  • DSP BlackRock Tax Saver Fund
  • Axis Long Term Equity Fund
Large Cap Funds
  • SBI Bluechip Fund
  • DSP BlackRock Focus 25 Fund
Small & Mid Cap Funds
  • DSP Blackrock Micro Cap Fund
  • Mirae Asset Emerging Bluechip Fund
  • HDFC Mid Cap Opportunities
Indexed Funds
  • Kotak Nifty ETF
  • G S Nifty BeES
Long Term Income Funds
  • ICICI Prudential Long Term Plan
  • HDFC High Interest – Dynamic
Short Term Debt Funds
  • Birla Sun Life Short Term Fun
  • ICICI Prudential Banking & PSU Debt Fund
Liquid Funds
  • ICICI Prudential Liquid Plan
  • Indiabulls Liquid Fund
Ultra Short Term Funds
  • DSP BlackRock Ultra-Short Term Fund
  • ICICI Prudential Ultra Short Term Plan

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