Untangle 50 funds without the tax bill

Summary: He invested steadily for 25 years, never sold a single fund, only redirected his SIP to whichever was doing better. After two and a half decades of attentiveness, he owns 50 funds and a tax bill he hadn't bargained for if he tries to clean it up.

Summary: He invested steadily for 25 years, never sold a single fund, only redirected his SIP to whichever was doing better. After two and a half decades of attentiveness, he owns 50 funds and a tax bill he hadn't bargained for if he tries to clean it up. A reader wrote to me recently with a confession that many investors would recognise as their own. He has been investing steadily for close to 25 years, with SIPs running without a break, which is exactly the discipline that all good financial advice tries to instil. There was only one habit he now regrets. Every year or so, when he noticed a fund doing better than the ones he was buying, he pointed his SIP money at the new winner, without ever touching what he had accumulated in the old one. He never sold. He only redirected. After two and a half decades of this, he owns more than 50 funds. The obvious tidy-up, selling the clutter and folding it into a handful of good schemes, would land him with a tax bill he had not bargained for. What, he asked me, should he do? The first thing I want to say to him, and to everyone who recognises their own portfolio in his, is that the number 50 is a distraction. The question worth asking is not how many funds you hold. It is how many genuinely different things you own, and these are rarely the same number. An investor who keeps moving towards whichever fund has late