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 | |
| ICICI Prudential Focused Equity Fund | 10.17 | 21.97 | 22.19 | 16.35 |
| Invesco India Focused Fund | -8.74 | 20.29 | 19.18 | – |
| HDFC Focused Fund | 7.28 | 20.17 | 25.00 | 14.85 |
| DSP Focused Fund | 2.95 | 18.24 | 15.66 | 12.97 |
| Bandhan Focused Fund | -4.02 | 17.86 | 14.89 | 13.47 |
| Mahindra Manulife Focused Fund | 1.14 | 17.54 | 21.00 | – |
| SBI Focused Fund | 12.20 | 17.12 | 16.90 | 15.51 |
| JM Focused Fund | -5.05 | 16.44 | 15.74 | 13.89 |
| Canara Robeco Focused Fund | 1.86 | 16.21 | – | – |
| Edelweiss Focused Fund | -1.78 | 16.15 | – | – |
Data as on December 9, 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