This paper aims to investigate the consequences of investing in a single fund family for investors. In essence, we focus on the correlation among portfolio holdings of funds with effects in terms of under-diversification for mutual fund investors, especially, if they invest in the same fund family. We also explore the fund manager autonomy in portfolio holding allocation within families and determine the characteristics of those fund families with higher autonomy. Our results show that a higher correlation among funds not only implies that families offer a lower diversification to investors; it also has a negative effect on their performance. However, investors’ performance benefits from a higher manager autonomy. Consequently, investors who select a single fund family could obtain higher returns in smaller fund families with considerable experience that do not belong to a banking or insurance group, as in the former, diversification and manager autonomy are higher.