Widely read:
Answer transcript: Not as much. Here you are primarily looking at the fund manager's skills and there is a lot of overlap in the underlying portfolios of debt funds. Most debt fund managers are heavily reliant on government securities though maturities may be different. However, diversification beyond a point is problematic from the point of view of your own interest. If 1 out of 10 funds doesn't do well, you will tend to ignore your loser and book gains in your winners. Find good funds and own 2-3 such funds. Ask yourself what extra benefit are you getting with additional funds.
This article was originally published on March 21, 2017.
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