What are Focused Funds?
Focused funds are open-ended equity mutual funds that follow a concentrated investment strategy focusing on a limited number of stocks. According to the SEBI guidelines, focused funds can invest in up to 30 stocks with at least 65% of their fund portfolio invested in equities and equity-related instruments. SEBI guidelines also require these funds to mention their intended market capitalization exposure viz multi-cap, large-cap, small-cap or midcap.
Why Invest in Focused Funds?
- A focused fund identifies and invests in high conviction stocks for higher returns
- Higher allocation to high conviction stocks usually delivers over the long term
- The concentrated approach reduces the opportunity cost of under-allocating to winning investment ideas
- Concentrated portfolios reduce the risk of over-diversification
- Higher allocation to winning stocks significantly changes the performance of the overall fund portfolio performance
- Select companies in a growing economy often exhibit higher earnings and growth irrespective of the business cycle
Table of Top 10 Focused Funds
| Fund Name | Returns (%) | |||
| 1 year | 3 year | 5 year | 10 year | |
| Invesco India Focused Fund | -1.10 | 23.50 | – | – |
| ICICI Prudential Focused Equity Fund | 3.61 | 22.08 | 24.64 | 15.91 |
| HDFC Focused Fund | 5.71 | 21.59 | 27.96 | 15.02 |
| Mahindra Manulife Focused Fund | -5.28 | 18.14 | – | – |
| JM Focused Fund | -5.27 | 18.10 | 20.27 | 13.89 |
| Bandhan Focused Fund | -0.10 | 17.06 | 16.92 | 13.14 |
| Canara Robeco Focused Fund | 1.90 | 16.76 | – | – |
| DSP Focused Fund | -2.20 | 16.41 | 18.30 | 12.37 |
| Edelweiss Focused Fund | -3.24 | 16.19 | – | – |
| HSBC Focused Fund | -1.66 | 15.81 | 19.56 | – |
Data as on September 15, 2025
Who Should Invest in Focused Funds?
- Those aiming for wealth creation with investment horizons of at least 3-5 years
- Staying invested in the long term to increase the possibility of generating positive returns
- Those with aggressive risk profile seeking to benefit from equity investing through a focused portfolio consisting of high conviction bets