Erosion in value
There is a flip side to this entire situation because the risk is that if the market movements do not turn out as expected then there could be sharp erosion in the value of the fund and the investors will suffer. Such events have been witnessed a lot of times in the history of Indian mutual funds.
During the technology boom even diversified equity schemes had a concentration of their investments in this sector. As long as the situation was good there was a very good performance but when things soured the largest hit was also taken by all these schemes.
Also see: Five mutual fund myths