Story of new-age investors

Summary: Fifteen mutual funds. One confused portfolio. This story shows how over-diversification dilutes returns, why tiny SIPs create a long tail of dead weight and how a simpler, purpose-led portfolio can unlock real progress. Abhinav Sharma, 25, is the kind of investor every financial planner hopes for. Early starter, disciplined saver and curious learner. Earning Rs 1 lakh a month, he invests Rs 25,000 in mutual funds and Rs 10,000 in a recurring deposit. Yet, a look at his portfolio revealed 15 mutual funds: large caps, flexi caps, small caps, sectoral/thematic funds and even an index fund. Many SIPs were between Rs 500 and Rs 1,000. “I just wanted to be diversified,” he explained. In his defence, though, his enthusiasm isn’t the problem. The structure is. The bigger picture AMFI data shows that SIP inflows hit a record Rs 29,361 crore in September 2025—five times higher than eight years ago. This reflects how mutual fund investing has become a national habit, driven by the rapid rise of digital convenience. But convenience has its flipside. While investing now takes only a few clicks, it also encourages impulsive buying and selling. Many investors chase top-performing funds without clear goals or long-term plans. Our analysis shows how this over-enthusiasm plays out (see graph: “When diversifi

This article was originally published on November 20, 2025.