09.09.19
How Many Mutual Funds Are Too Many?
by: Dan Weil
Financial experts say that at some point, adding funds for diversification purposes becomes counterproductive. For some advisors, the number is as low as 10; for others, it's closer to 20. “Once you get into the 20s, you're getting marginal benefits from a diversification standpoint,” says Josh Charlson, a director of manager selection at Morningstar. Investors can become so diversified that they simply mimic a big index, while paying needless fees. It is also more difficult to track and rebalance a portfolio with many funds, and investors with a lot of funds in a nonretirement account may face substantial taxes.
Read the full article on Wall Street Journal