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Mutual fund investors have more investment options than those who stick only to equities. In fact, Value Line provides information on around 20,000 mutual funds but only about 6,000 stocks—note that that stock number represents almost the entire market cap of available equities. The discrepancy between the two numbers is simple, a single stock can be owned by multiple mutual funds. It wouldn’t be far from the truth to say that creating a mutual fund portfolio can be a daunting task, despite the perception that they are less difficult to understand.

In general, there are two ways to look at investing in funds: cherry pick your funds or stick to one family. The cherry picking approach, assuming you meet all of a fund’s investment minimums, has the benefit of providing the most diverse list of potential candidates. However, it may require you to start financial relationships with multiple different companies. This can become confusing to track and definitely creates a lot of paperwork—particularly at tax time.

Going with just one family, on the other hand, can make things very simple, but it limits your fund options. That said, larger fund sponsors, such as Fidelity and Vanguard, have a myriad of fund choices for investors to select from. Moreover, while their funds may not be the “best in class” for every category, they are usually at least middle-of-the-pack performers. So while you can’t guarantee getting the “best” fund, you can be reasonably confident that you won’t get a bad one. Of course, a little research will go a long way in weeding out the funds you simply don’t want to touch. The large fund houses also tend to offer the most diverse collections of index funds. So, if you can’t find an actively managed fund to your liking, there will usually be a fallback option.

For the limitation on the selection front, you gain the benefit of having just one relationship. This can lead to reduced costs and better service. Vanguard, for example, puts shareholders who have relatively large total holdings with the firm into a special fund share class with lower expenses. With regard to service, having just one company to deal with allows you to simplify your communications and, frankly, larger fund houses have the financial wherewithal to hire, train, and retain high quality staff. That isn’t to suggest that smaller fund shops don’t have good employees, only that a Fidelity or a Vanguard has more heft, which gives it material flexibility. Vanguard, for one, is renowned for its customer service.

There is, however, another option for those who want their cake and eat it, too. Both Fidelity and Vanguard provide brokerage accounts through which they sell funds from other companies. This is no different than opening an account with Charles Schwab (SCHW) or a similar broker. In this scenario, fund investors get to cherry pick and deal with just one company (the brokerage arm of the fund company).

However, there are limitations to the broker approach. For starters, although brokers offer a large array of fund choices, they most likely do not offer every fund from every family. So there is a possibility that the fund you might want to purchase won’t be available at the broker of your choice. Also, there may be commission costs involved; after all brokers make money by charging people for the trades they make and trading a mutual fund is, in the end, no different than trading a stock. Make sure you know the trading costs you might have to face before trying to make a trade.

Even if the fund you select is on a list of “no transaction fee” funds, you are still likely to be paying more than going direct to a fund company. This is because funds pay to be included on a broker’s “no transaction fee” list. The fund family passes those costs along to shareholders in the form of added fees (12b1 fees, to be exact). So, no matter how you cut it, using a broker will likely lead to higher ongoing costs.

Going with a hybrid approach, such as using Fidelity, could be the best of both worlds. Sticking mainly with Fidelity funds would limit costs, but still give you the option of going outside the Fidelity fund family for select funds. True, the non-Fidelity funds would likely cost more to own, but overall the costs would be cheaper than going through a traditional broker and the headache would be less than going to each fund company individually.

While there is no right or wrong way to own a portfolio of mutual funds, it is something that fund investors should consider before taking an unplanned scatter shot approach. There are good and bad features of each approach, a few minutes of thought can help you figure out which one is right for you.

At the time of this articles writing, the author did not have positions in any of the securities mentioned.