Review Before You Add
A salary increase often creates additional room for investment, leading many investors to consider starting new mutual fund schemes. However, financial experts suggest that this is not always the best move. Kumar Binit, CEO of airpay money, advises that the primary question should not be "which new fund should I add?" but rather "does my current portfolio still meet my needs, and can I step up my existing SIPs?"
If the funds already in an investor's portfolio continue to align with their financial goals, increasing the Systematic Investment Plan (SIP) amount in those existing schemes is often a more logical step than automatically adding a new scheme simply because income has risen.
The Risk of Redundancy
Vijay Maheshwari, founder of Stocktick Capital, emphasizes that investors must first check whether their existing portfolio is functioning as intended. This involves reviewing asset allocation, risk levels, portfolio overlap, and investment style.
"More mutual funds do not necessarily mean more diversification. Better portfolio construction does," Maheshwari notes. Simply adding more schemes can sometimes create overlap, resulting in a portfolio holding funds with similar underlying stocks. This not only fails to provide true diversification but also makes the portfolio harder to monitor and manage.
When to Add a New Fund
This does not mean investors should never add a new scheme. A new fund may make sense if it fills an actual gap in the portfolio. For example, an investor might need exposure to a specific asset class, market-cap segment, or investment style that is currently missing.
Maheshwari illustrates this with an example: adding another large-cap fund that holds many of the same stocks as an existing large-cap fund creates the appearance of diversification without meaningfully changing the portfolio. Conversely, if a portfolio is heavily tilted towards equity and the investor has a goal coming up in the next few years, simply increasing equity SIPs may not be the right move. The additional money might need to be directed towards another asset class, such as debt, depending on the investor's specific goals and overall asset allocation.
Record SIP Activity
This debate is becoming increasingly relevant as mutual fund investments grow in India. According to the Association of Mutual Funds in India (AMFI), monthly SIP contributions touched a record Rs 32,297 crore in August 2026, up from Rs 31,961 crore in July. The number of outstanding SIP accounts also rose to approximately 10.75 crore, indicating a growing pool of regular investors.
Practical Approach
Consider an investor earning Rs 1 lakh a month who invests Rs 15,000 through SIPs across two diversified equity funds. If their income rises to Rs 1.2 lakh and expenses remain stable, one option is to simply increase the SIP amount in the same two funds rather than searching for a third or fourth scheme.
Similarly, if an investor already puts Rs 30,000 a month across three mutual funds and has an additional Rs 10,000 available, they should first review if the existing funds still fit their goals. If the asset allocation remains appropriate, the extra amount can be added to existing SIPs. However, if a portfolio review reveals a genuine gap, such as inadequate debt exposure or excessive concentration in one market segment, the additional funds should be used to address that specific issue.
The broader takeaway is that having more money to invest does not automatically require more mutual funds. A better starting point is to assess whether the existing portfolio is still fulfilling its intended purpose and whether a new fund would genuinely improve it. If not, increasing existing SIPs is often the simpler and more effective route.