Just investing in more MF schemes can’t create a robust portfolio: Know other factors

If you make several SIPs every month and feel like your funds are diversified, it might not be the case. To understand whether your portfolio is diversified, it's important to keep a few key factors in mind. Diversification in crucial to spread your risks.

Kolkata: Having several SIPs doesn’t mean your investments are diversified. It’s important to understand how to identify overlapping funds and decide whether you need to consolidate. You’re investing money in five or six SIPs every month, spread across different mutual fund schemes, perhaps even different fund houses. But does that mean your investments are diversified?

Many of those schemes may be investing in the same companies, so you may have more funds but not necessarily more diversification. Five SIPs may seem safer than two, but diversification depends on what you have, not how many funds you have, says Tushar Bopche, co-founder and CEO of InvestValue Capital.

Multiple SIPs can have similar stocks

Under SEBI categorization rules, large-cap funds must invest at least 80% of their assets in the top........

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