Mutual Fund Overload? Simplify Your Portfolio, Boost Returns & Avoid Hidden Costs

• Many investors accumulate too many mutual funds, mistaking quantity for quality, leading to overlapping portfolios and increased hidden costs.
• Overlapping funds mean paying multiple expense ratios for the same stock exposure, reducing long-term returns and undermining diversification.
• Identify overlaps by reviewing mutual fund factsheets' 'Top Holdings' section for repeated stocks (e.g., Reliance Industries, HDFC Bank) or using portfolio analysis tools like Zerodha Coin or Groww.
• Experts recommend consolidating portfolios by selecting only the best-performing, reliable funds within each category and diversifying across different fund houses.
• To reduce tax hassles when exiting funds, consider exit loads and wait for investments to complete one year to benefit from LTCG exemptions and lower tax rates.

Why It Matters: Simplify your mutual fund portfolio to reduce costs, avoid overlaps, and improve net returns for better financial health.