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 | 0.78 | 25.04 | – | – |
| HDFC Focused Fund | 7.12 | 24.06 | 28.04 | 15.80 |
| ICICI Prudential Focused Equity Fund | 3.34 | 23.68 | 24.83 | 16.68 |
| Mahindra Manulife Focused Fund | -5.65 | 20.98 | – | – |
| JM Focused Fund | -7.41 | 20.05 | 19.84 | 14.77 |
| Canara Robeco Focused Fund | 4.02 | 19.52 | – | – |
| Bandhan Focused Fund | 1.06 | 18.70 | 17.95 | 14.14 |
| Edelweiss Focused Fund | -3.34 | 18.63 | – | – |
| HSBC Focused Fund | -2.00 | 17.89 | 20.58 | – |
| DSP Focused Fund | -3.36 | 17.67 | 18.48 | 12.83 |
Data as on August 29, 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