. Among Different Funds: Another way in which diversification can be done by investors is through holding various mutual funds, where every mutual fund specializes in some different asset class or a different investment strategy. An investor may hold a combination of equity funds, bond funds, and international funds

In mutual funds, there are diversifications at two levels:
1. Within the Fund: A mutual fund usually invests in a wide range of securities, such as stocks, bonds, or real estate. A well-managed fund will hold a variety of investments across different sectors and geographic regions.

. Among Different Funds: Another way in which diversification can be done by investors is through holding various mutual funds, where every mutual fund specializes in some different asset class or a different investment strategy. An investor may hold a combination of equity funds, bond funds, and international funds.

Within the Fund: A mutual fund usually invests in a wide range of securities, such as stocks, bonds, or real estate. A well-managed fund will hold a variety of investments across different sectors and geographic regions.if one does not put all his eggs in one basket, it is sure to save a portfolio from big losses. If one investment does badly, the other may go well and vice versa; hence, the overall performance is well-balanced.