New Delhi, July 12 -- A well-diversified portfolio is built by combining different asset classes, investment styles, and market segments, and not by investing in multiple mutual funds.

According to Aditya Agarwal, Co-Founder, Wealthy.in, investors should focus on the role each fund plays in the portfolio rather than the total number of schemes they own.

Agarwal explains, "Fund count and diversification are not the same thing. Diversification improves when a portfolio gains exposure to different asset classes, market-cap segments, investment styles, geographies or risk factors."

"If the new fund invests in the same set of stocks, sectors and themes that are already present in the portfolio, the investor may be buying repetition rather t...