diversification works by combining things that behave differently. Owning eight large-cap equity funds is not diversification, because they hold the same companies; the portfolio has eight fee bills and one exposure. Owning forty positions where the bottom twenty are 0.3% each is not diversification either, since they cannot move the result.
A quick test is overlap. If two funds share 70% of their holdings by weight, the second fund is mostly a fee on the first. Another test is contribution: if a position at 0.5% doubles, it adds 0.5% to the portfolio. Ask whether that is worth the research and monitoring time.
The fix is fewer, more distinct exposures with meaningful weights, plus a clear reason for each one. See concentration-risk for the opposite failure.
Related: diversification, naive-diversification, concentration-risk, core-satellite