The proliferation of mutual fund choices, driven by new asset management firms, presents a 'choice overload' problem for investors. This can lead to suboptimal decisions, such as keeping savings in low-return bank deposits due to confusion or employing 'diversification heuristics' that are ineffective with too many options. Overlapping investments among funds with similar benchmarks like the NSE 500 further complicate selection, potentially hindering investors from achieving optimal returns.