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Focused Funds

Focused funds typically focus on very few sectors of the global equity market. There are many different ways to categorize the strategies of Focused funds. First, the investor needs to understand what the fund manager is trying to accomplish with their investments. View More

Some investors might want to consider investing in a focused fund because of the situation or style of the companies chosen. For example, one might invest in a fund that invests in pharmaceutical companies developing new drugs to help people with cancer. Or one may invest in a fund that invests in basic materials and industrial industries of Europe.

Best Focused Funds

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Search Result - 29 Mutual Funds

Who should Invest in Focused funds?

There are many different reasons why someone should invest in a Focused fund. View More

The first is to invest in companies with strong management teams and strong fundamentals.
The second is to invest in companies that pay out a large portion of their income each year.
Third, one can consider investing in Focused funds with specific industries such as pharmaceuticals and basic materials. One can look at the fund’s performance over time to see how well the manager has done their job. Focused funds make some of the best investment decisions out of all the different funds.
Focused funds are often considered more stable and predictable than other investments. The fund does not have to deal with many stocks and sectors.
Focused funds are usually best for investors who want to invest in a limited number of sectors with the help of a team of high-calibre investment managers. The emphasis is placed on the Focused fund manager’s expertise, skills, and knowledge and his ability to manage that specific industry. The fund manager must identify stocks and industries that will perform well against the market trends.
In addition, being focused on one type of industry allows you to track performance more closely than focusing on many different industries. This lets you get an idea of how well the fund manager is replicating the market and how much risk it would be to invest in that particular Focused fund.

Features of Focused funds:

The most important feature of Focused funds is their ability to manage volatility. Volatility is a measure of the stock price fluctuations, which can be good or bad for investors. For example, if a company has high volatility, the earnings per share can often change significantly from one earnings report to the next. View More

The other key feature of Focused funds is their ability to not trade too frequently. Focused funds do so well because they do not have to deal with all different kinds of stocks and sectors all at once.

Focused funds’ third and final benefit is their ability to reward shareholders with dividends. A dividend is a portion of the company’s earnings that it gives back to shareholders in cash and stock dividends. This can be a great way for investors to enhance their portfolios without making additional investments by themselves.

Factors to consider while investing in Focused Funds

Here is a list of factors you can consider before investing in focused funds. View More

Age
Focused funds are ideal for young investors who have several years to retire. They can take the risk associated with them. Individuals who are nearing retirement may not be willing to take this risk. However, aggressive investors with a solid portfolio can consider them if they have a longer time horizon.

Time Horizon
As focused funds comprise only a few stocks, they are highly volatile in the short term. When the market crashes, your fund’s value can take a considerable hit. It is advisable to invest in focused funds only if you have a time horizon of at least five years.

Risk
Multi-cap funds diversify the investment into several stocks and thus reduce the overall risk. Large-cap funds invest in stocks that have a solid standing and are not risky.

However, focused funds invest in a maximum of around 30 stocks and are significantly riskier than other types of equity funds. Thus, you should consider these funds only if your risk tolerance and appetite allow it. In the long term, these funds can beat the market and give higher returns than their counterparts.

Taxation
The tax implication for focused funds is the same as for other equity mutual funds. If you exit the fund before a year, you will have to pay a short-term capital gain tax of 15%. If you hold the fund for more than one year, you get taxed as per the long-term capital gain tax at 10%.

Cost
All AMCs charge an expense ratio for managing your mutual funds. It is expressed as a percentage, and a higher expense ratio can mean a dent in your profits. It is advisable to check the expense ratio before investing in a focused fund.

Investment Goal
Individuals have different financial goals. Focused funds are not for you if you are looking for returns in the short term. They should also not be your primary or first investment instrument. On the other hand, if you are a seasoned investor looking to add something to your portfolio, you can consider focused funds. However, you may want to ensure that you are comfortable with the associated risk.

Fund Manager
Fund managers are the experts who research and handpick the stocks that should comprise a fund. They follow the fund’s progress and make corrections along the way to give the best returns to the investors. Studying the other funds managed by them can help you predict the success of the focused fund that interests you.

Taxability of Focused funds

The taxability of Focused funds depends on the sector and type of investment being made; it may not necessarily be taxed at the standard capital gains rate. View More

The taxability of Focused funds usually depends on the overall market performance. If the overall market is going down, it is said to be a bear market, and the value of your Focused fund will likely go down as well.
However, if the overall market is going up slightly, you can expect to see that your Focused fund will also do well. This is also true with a flat market, which means no major changes in equity value.
If there were an enormous spike in the net worth of your portfolio and you plan to sell any positions which have appreciated greatly, you will almost certainly have to pay taxes on those gains.

Risks Involved with Focused funds

Although Focused funds can offer certain advantages over other funds, investors need to know how exposed they are to specific sectors. Investors should also remember that a single investment can dramatically affect the overall performance of their fund. View More

The performance and value of one sector can cause drastic movements in the fund’s value if it is included as part of it.
Investors might want to consider investing in best Focused funds with shallow exposure to specific sectors or at least be aware of how much exposure they are taking on.
It is crucial to understand that the high performance of these funds can come at a cost.
Also, since the fund is focused on a specific sector or set of industries, you need to be prepared for large losses.
When an investor invests in a Focused fund, they should also be aware of its risks.
The risk associated with an individual stock is much higher than the risk of a Focused fund because investors are diversifying a portfolio of stocks instead of just one or two.
If one or two stocks underperform, it will affect your Focused fund’s overall performance.

Advantages of Focused funds

Focused funds allow an investor to have a diversified position in only one or two sectors. These types of funds are best Focused funds can be beautiful to an investor looking for better diversification. However, it is also important to remember that Focused funds mutual funds are View More

continually managed and carefully monitored by portfolio managers to help protect the investor’s investments in the fund. Focused funds have shown a performance advantage over the market index, but it is important to note that past performance is not indicative of future performance.

Focused funds returns can allow the investor to capture excess on securities in a particular industry or sector. This may include capturing opportunities from market inefficiencies, changes in regulation and business regulation, etc. However, these benefits may not be experienced by Focused funds investors because of their lack of flexibility and limited diversification options.

Popular Focused Funds

  • Fund Name
  • Min SIP Investment Amt
  • AUM (Cr.)
  • 3Y Return

Quant Focused Fund – Direct Growth is an Focused scheme that was launched on 07-01-13 and is currently under the management of our experienced fund manager Sanjeev Sharma. With an impressive AUM of ₹809 Crores, this scheme's latest NAV is ₹92.9455 as of 18-04-24.

Quant Focused Fund – Direct Growth scheme has delivered a return performance of 56.4% in the last 1 year, 24.9% in the last 3 years, and an 19.4% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Focused funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹809
  • 3Y Return
  • 56.4%

Nippon India Focused Equity Fund – Direct Growth is an Focused scheme that was launched on 02-01-13 and is currently under the management of our experienced fund manager Vinay Sharma. With an impressive AUM of ₹7,607 Crores, this scheme's latest NAV is ₹111.489 as of 18-04-24.

Nippon India Focused Equity Fund – Direct Growth scheme has delivered a return performance of 31.3% in the last 1 year, 18.8% in the last 3 years, and an 17.9% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Focused funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹7,607
  • 3Y Return
  • 31.3%

360 ONE Focused Equity Fund – Direct Growth is an Focused scheme that was launched on 30-10-14 and is currently under the management of our experienced fund manager Mayur Patel. With an impressive AUM of ₹6,794 Crores, this scheme's latest NAV is ₹46.8296 as of 18-04-24.

360 ONE Focused Equity Fund – Direct Growth scheme has delivered a return performance of 37% in the last 1 year, 22.4% in the last 3 years, and an 17.7% since its launch. With a minimum SIP investment of just ₹1,000, this scheme offers a great investment opportunity for those looking to invest in Focused funds.

  • Min SIP Investment Amt
  • ₹1,000
  • AUM (Cr.)
  • ₹6,794
  • 3Y Return
  • 37%

Union Focused Fund – Direct Growth is an Focused scheme that was launched on 05-08-19 and is currently under the management of our experienced fund manager Hardick Bora. With an impressive AUM of ₹388 Crores, this scheme's latest NAV is ₹23.72 as of 18-04-24.

Union Focused Fund – Direct Growth scheme has delivered a return performance of 30.7% in the last 1 year, 17.1% in the last 3 years, and an 20.2% since its launch. With a minimum SIP investment of just ₹1,000, this scheme offers a great investment opportunity for those looking to invest in Focused funds.

  • Min SIP Investment Amt
  • ₹1,000
  • AUM (Cr.)
  • ₹388
  • 3Y Return
  • 30.7%

ICICI Pru Focused Equity Fund – Direct Growth is an Focused scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Sankaran Naren. With an impressive AUM of ₹7,582 Crores, this scheme's latest NAV is ₹83.46 as of 18-04-24.

ICICI Pru Focused Equity Fund – Direct Growth scheme has delivered a return performance of 45% in the last 1 year, 24.9% in the last 3 years, and an 16.3% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Focused funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹7,582
  • 3Y Return
  • 45%

Sundaram Focused Fund – Direct Growth is an Focused scheme that was launched on 02-01-13 and is currently under the management of our experienced fund manager Ravi Gopalakrishnan. With an impressive AUM of ₹1,033 Crores, this scheme's latest NAV is ₹156.148 as of 18-04-24.

Sundaram Focused Fund – Direct Growth scheme has delivered a return performance of 35% in the last 1 year, 18.3% in the last 3 years, and an 15.4% since its launch. With a minimum SIP investment of just ₹300, this scheme offers a great investment opportunity for those looking to invest in Focused funds.

  • Min SIP Investment Amt
  • ₹300
  • AUM (Cr.)
  • ₹1,033
  • 3Y Return
  • 35%

HDFC Focused 30 Fund – Direct Growth is an Focused scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Roshi Jain. With an impressive AUM of ₹10,432 Crores, this scheme's latest NAV is ₹206.907 as of 18-04-24.

HDFC Focused 30 Fund – Direct Growth scheme has delivered a return performance of 40.6% in the last 1 year, 30.5% in the last 3 years, and an 15.6% since its launch. With a minimum SIP investment of just ₹100, this scheme offers a great investment opportunity for those looking to invest in Focused funds.

  • Min SIP Investment Amt
  • ₹100
  • AUM (Cr.)
  • ₹10,432
  • 3Y Return
  • 40.6%

Franklin India Focused Equity Fund – Direct Growth is an Focused scheme that was launched on 01-01-13 and is currently under the management of our experienced fund manager Ajay Argal. With an impressive AUM of ₹11,160 Crores, this scheme's latest NAV is ₹104.7032 as of 18-04-24.

Franklin India Focused Equity Fund – Direct Growth scheme has delivered a return performance of 38.6% in the last 1 year, 23% in the last 3 years, and an 19.1% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Focused funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹11,160
  • 3Y Return
  • 38.6%

SBI Focused Equity Fund – Direct Growth is an Focused scheme that was launched on 02-01-13 and is currently under the management of our experienced fund manager R Srinivasan. With an impressive AUM of ₹32,190 Crores, this scheme's latest NAV is ₹326.0546 as of 16-04-24.

SBI Focused Equity Fund – Direct Growth scheme has delivered a return performance of 31% in the last 1 year, 16.8% in the last 3 years, and an 15.8% since its launch. With a minimum SIP investment of just ₹5,000, this scheme offers a great investment opportunity for those looking to invest in Focused funds.

  • Min SIP Investment Amt
  • ₹5,000
  • AUM (Cr.)
  • ₹32,190
  • 3Y Return
  • 31%

Kotak Focused Equity Fund – Direct Growth is an Focused scheme that was launched on 16-07-19 and is currently under the management of our experienced fund manager Shibani Kurian. With an impressive AUM of ₹3,187 Crores, this scheme's latest NAV is ₹23.037 as of 18-04-24.

Kotak Focused Equity Fund – Direct Growth scheme has delivered a return performance of 33.5% in the last 1 year, 18.8% in the last 3 years, and an 19.3% since its launch. With a minimum SIP investment of just ₹100, this scheme offers a great investment opportunity for those looking to invest in Focused funds.

  • Min SIP Investment Amt
  • ₹100
  • AUM (Cr.)
  • ₹3,187
  • 3Y Return
  • 33.5%

Frequently Asked Questions

What is better - focused mutual funds or diversified equity funds?

Your choice of mutual fund should depend on your investment goals and risk tolerance. A diversified equity fund invests in several stocks spread across multiple sectors. It is a strategy that can reduce your risks.

However, it increases your equity exposure which can reduce your profits. On the other hand, a focused fund is hazardous as the exposure to multiple equities is limited. However, they also give the highest returns. 

When should I invest in a focused mutual fund?

Usually, a focused mutual fund is an add-on to an existing portfolio. It is inadvisable to invest in this fund if you are a beginner. Moreover, it is recommended to consider your liquidity before you go ahead with it. 

What is the most significant advantage of focused mutual funds?

A focused mutual fund invests in a maximum of 30 stocks. It allows fund managers to handpick stocks after thorough research. A detailed and in-depth analysis is done before they make the portfolio. It enables you to make higher profits. Moreover, they keep reviewing the portfolio to make changes when required to get you the best returns.

Who are these focused funds suited for?

Focused funds are not for the average investors looking for an investment instrument to park their funds and earn returns. As these funds focus on a handful of stocks, they carry more risk.

These funds are suitable for individuals comfortable taking such a high degree of risk. The fund can either go uphill or downhill. The individual’s finances and personal outlook should not take a hit when the latter happens. 

Investors who want to build a satellite fund in their portfolio can also consider focused funds. Including these funds can help optimise returns and average out the risk. However, investors should have a longer time horizon with at least five years to park their money.

 

Can I invest in focused mutual funds through SIP?

You can invest in your selected focused mutual fund through a SIP. You can log in to your Upstox account for more details.

Is there a lock-in period for focused funds?

There is no lock-in period for focused funds. However, the horizon period for these equity funds is usually at least 5-7 years. It is advisable to consider this before investing in these funds.

What is the tax rate in the case of focused mutual funds?

As focused mutual funds are equity funds, the gains are taxed at standard rates for long-term and short-term capital gains. You must pay short-term capital gains if you exit your mutual fund before 12 months. The gains are taxed at a rate of 15% in this case.

On the other hand, you have to pay long-term capital gains if the holding period of the focused mutual fund is more than a year. In this case, you will have to pay a long-term capital gain tax of 10%.

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