What are Focused Funds?
Focused funds are those 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 10 Best Focused Funds
| Fund Name | Returns (%) | |||
| 1 year | 3 year | 5 year | 10 year | |
| Invesco India Focused Fund | 8.67 | 29.21 | – | – |
| HDFC Focused Fund | 9.53 | 27.87 | 30.67 | 15.45 |
| ICICI Prudential Focused Equity Fund | 8.33 | 27.33 | 27.15 | 16.12 |
| Mahindra Manulife Focused Fund | 0.53 | 25.73 | – | – |
| Bandhan Focused Fund | 12.08 | 23.55 | 21.74 | 13.80 |
| DSP Focused Fund | 5.22 | 23.13 | 21.37 | 12.69 |
| JM Focused Fund | -1.61 | 23.11 | 22.20 | 14.04 |
| Canara Robeco Focused Fund | 9.38 | 22.95 | – | – |
| HSBC Focused Fund | 5.46 | 22.05 | – | – |
| 360 ONE Focused Fund | -0.80 | 21.96 | 24.26 | 16.93 |
Data as on July 17, 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