How many equity mutual funds should people hold of the same investment type 
      before the benefits of diversification diminish? The figures below show the 
      average statistical correlation between the number of funds in your portfolio 
      and an underlying benchmark index. The higher the number, the greater the 
      likelihood you'll mimic the market.
      
      NUMBER OF                 TYPE OF FUND
      FUNDS IN YOUR               GROWTH &
      PORTFOLIO       GROWTH  INCOME  BALANCED  INTERNATIONAL
              1       .91       .94      .91       .82
              2       .93       .96      .95       .91
              4       .95       .97      .96       .92
              6       .95       .98      .96       .92
              8       .95       .98      .97       .92
              10      .99       .98      .97       .92
      DATA: PRUDENTIAL DIVERSIFIED INVESTMENT STRATEGIES
      
      
Before it's here, it's on the Bloomberg Terminal. LEARN MORE