What is the ideal number of schemes for your mutual fund portfolio?

In order to achieve their financial objectives, wealth managers advise clients to diversify their mutual fund portfolios over a range of asset classes, including gold, fixed income, and equities. This would include expanding their portfolio to include many schemes.
How Do Investors Spread Their MF Portfolios?
Investors have distinct life goals and objectives that must be accomplished in different time frames.

Different asset classes, such as equities, fixed income, and gold, or a mix of them, would be needed to achieve these aims. As a result, portfolio diversification across asset classes and schemes is necessary.
Why make multiple scheme investments?
Each scheme in an investor’s portfolio serves a particular purpose. For instance, you may invest in an equity savings fund to save for a vacation that is one to two years away or to pay for your children’s school one year from now. Alternatively, you could invest in an arbitrage fund or a liquid, ultra-short-term fund to fulfil your emergency requirements.
A gold fund would be used as an inflation hedge, while a target maturity fund may be used if you want to stash money away securely for, say, five years from now. In the equity space, alpha may be generated, and objectives that are ten years away can be met by investing in small-cap funds; alternatively, ELSS funds can be used to avoid taxes under Section 80C of the Income Tax Act. Investing in large-cap companies might be done using a passive index fund.
Those seeking worldwide exposure to geographically diverse portfolios may purchase a US-based or Nasdaq fund, while those confident in a certain broad subject and confident in timing the market would invest in a technology fund or a themed fund such as a business cycle fund. Due to all of this, investors’ mutual fund portfolios eventually include more than one or three schemes.
What is the ideal number of plans?
The number of schemes in an investor’s portfolio might be challenging to limit, according to financial advisers, as mutual funds are being used by investors more and more to achieve both short- and long-term objectives. They do believe, nevertheless, that investors should limit themselves to no more than ten schemes, since managing and monitoring more is challenging.
Examining overlaps with a comparable scheme is one approach to reducing the number of schemes in portfolios. An investor should consider the degree of overlap in their portfolio before adding a flexi-cap fund, another large-cap fund, or an index fund, for instance, if they already have a large-cap scheme. A large overlap suggests that diversification is ineffective and won’t provide any additional returns to the portfolio.