Why should a business paper get into the business of short-listing investment-worthy mutual funds? I ask this question, not from the readers’ point of view, but from our own. The whole thing is fraught with problems that make the final list almost not worth the effort. First, what if despite the hard work of putting in place number-based filters (returns, risk and portfolio characteristics) and then making the shortlist of funds jump through the qualitative hoops (that includes talking to the fund managers and other information sources), some of the funds that get on the list mis-fire? That you end up with egg on your face is a minor problem, the bigger issue is that it affects real money of real people who have trusted you. While there is no foolproof way to give a 100% risk-free portfolio without it being only made of government securities, we do recommend holding at least two funds from each category to reduce the risk of a particular scheme malfunctioning due to factors beyond reasonable control. Therefore, diversification across asset classes, within asset classes and across fund houses is recommended.