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 | -1.85 | 23.77 | 22.62 | – |
| ICICI Prudential Focused Equity Fund | 4.86 | 23.45 | 24.93 | 15.44 |
| HDFC Focused Fund | 7.17 | 22.95 | 28.66 | 14.74 |
| JM Focused Fund | -2.57 | 19.99 | 20.49 | 14.07 |
| Mahindra Manulife Focused Fund | -2.27 | 19.81 | – | – |
| Bandhan Focused Fund | -0.01 | 18.72 | 16.74 | 12.88 |
| Canara Robeco Focused Fund | 2.98 | 18.05 | – | – |
| Edelweiss Focused Fund | -1.86 | 17.81 | – | – |
| DSP Focused Fund | -1.35 | 17.69 | 17.71 | 12.09 |
| HSBC Focused Fund | -1.01 | 17.65 | 19.32 | – |
Data as on October 10, 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