How many funds should you hold?

Diversification is often said to be ‘the only free lunch’ when it comes to investing, and funds are perhaps the simplest way to achieve this. Any investment fund represents a bundle of stocks, adding instant diversification to your portfolio. So, does it follow that more funds means more diversification and better returns, or is there a limit to how many funds it is sensible to hold? “The key is to build a diversified portfolio because this helps you weather different market co