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 many reasons, some of which include: A significant number of investors choose to reserve their portfolio management efforts for the Diwali season.
During this time, they take the opportunity to streamline and consolidate their mutual fund portfolios. There is an ardent need to cleanse up your portfolio. Trimming down your extensive mutual fund portfolio from a challenging 30 or 40 schemes to a more manageable 10 or 12 can be a daunting undertaking.
You have two options: you can either dedicate time to reassess your financial objectives and adjust your investment holdings accordingly, or you can consult a financial advisor for expert guidance on essential corrective actions. Categorizing your investments: All mutual fund houses are allowed to offer up to 36 different categories of schemes to investors. Then there are special kinds of funds that are theme-based, thus, explaining the launch of sectoral funds by
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