Major studies have shown that fund managers in general are unable to efficiently diversify the portfolios primarily due to a small number of securities.

Question

Quizplus · Accepted Answer

Although many mutual funds invest in 80 to 100 securities to achieve effective diversification, this is often more than is necessary. A high degree of diversification can be achieved with between 10 and 20 efficiently selected stocks.

Major Studies Have Shown That Fund Managers in General Are