{"id":36527,"date":"2025-03-14T11:12:22","date_gmt":"2025-03-14T05:42:22","guid":{"rendered":"https:\/\/kuvera.in\/blog\/?p=36527"},"modified":"2025-03-14T11:12:22","modified_gmt":"2025-03-14T05:42:22","slug":"what-are-focused-funds-top-focused-funds-in-india","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/what-are-focused-funds-top-focused-funds-in-india\/","title":{"rendered":"What are Focused Funds? Top Focused Funds in India"},"content":{"rendered":"

Focused funds can be seen as the opposite of diversified mutual funds. There are many exciting categories and types of mutual funds to discover in the mutual funds universe.\u00a0<\/span><\/p>\n

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\"Start<\/a><\/b><\/h4>\n

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Let us learn more about focused funds in this blog.<\/span><\/p>\n

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What Are Focused Funds?<\/b><\/h2>\n

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Focused funds are a category of equity mutual funds that invest in a concentrated portfolio of a limited number of stocks. According to SEBI (Securities and Exchange Board of India) regulations, focused funds can hold a maximum of 30 stocks in their portfolio. These funds can invest across market capitalizations (large-cap, mid-cap, and small-cap) and sectors, providing fund managers the flexibility to choose high-conviction bets.<\/span><\/p>\n

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How Focused Funds Differ from Diversified Funds<\/b><\/h2>\n

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The primary difference between focused funds and diversified funds lies in the number of stocks held in the portfolio:<\/span><\/p>\n

 <\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t
Feature<\/th>Focused Funds<\/th>Diversified Funds<\/th>\n<\/tr>\n<\/thead>\n
Number of Stocks<\/td>Max 30 stocks<\/td>Typically hold 50-100 stocks<\/td>\n<\/tr>\n
Risk Exposure<\/td>Higher due to concentrated holdings<\/td>Lower due to wider diversification<\/td>\n<\/tr>\n
Potential Returns<\/td>Can be higher if fund manager\u2019s stock picks perform well<\/td>More stable but may have moderate returns<\/td>\n<\/tr>\n
Volatility<\/td>High due to limited diversification<\/td>Lower due to sectoral and stock diversification<\/td>\n<\/tr>\n
Fund Manager's Role<\/td>Critical in stock selection and timing<\/td>More balanced approach across various stocks<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

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Focused funds require skilled fund management as the limited number of stocks means that every stock plays a crucial role in the overall portfolio\u2019s performance.<\/span><\/p>\n

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Risk and Return Profile of Focused Funds<\/b><\/h2>\n

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Risk Factors<\/b><\/h3>\n

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1. Higher Market Volatility<\/b><\/h4>\n

Since the portfolio consists of fewer stocks, any negative movement in one stock can significantly impact the overall returns.<\/span><\/p>\n

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2. Stock-Specific Risk<\/b><\/h4>\n

Unlike diversified funds that spread investments across a wide range of stocks, focused funds rely heavily on a few stocks, increasing the stock-specific risk.<\/span><\/p>\n

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3. Sectoral Risk<\/b><\/h4>\n

If a focused fund has a high allocation to specific sectors (like banking or IT), it can be more vulnerable to sectoral downturns.<\/span><\/p>\n

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4. Fund Manager Dependence<\/b><\/h4>\n

Performance is highly dependent on the expertise and decision-making of the fund manager.<\/span><\/p>\n

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Return Potential<\/b><\/h3>\n

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1. Higher Returns<\/b><\/h4>\n

If the selected stocks perform well, focused funds can generate superior returns compared to diversified funds.<\/span><\/p>\n

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2. Outperformance in Bull Markets<\/b><\/h4>\n

Focused funds tend to do well in bullish markets as high-conviction stocks rally strongly.<\/span><\/p>\n

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3. Volatility in Bear Markets<\/b><\/h4>\n

These funds can experience sharp declines when market conditions are unfavorable.<\/span><\/p>\n

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Top Performing Focused Funds in India<\/b><\/h2>\n

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Top 10 Focused Funds Based on 1-Year Return<\/b><\/h3>\n

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This table lists the top-performing focused funds based on their 1-year return. Invesco India Focused Growth Direct Plan leads with a return of <\/span>13.73%<\/b>, followed closely by <\/span>HDFC Focused 30 Growth Direct Plan<\/b> at <\/span>12.94%<\/b>. The table also includes each fund\u2019s <\/span>Total Expense Ratio (TER)<\/b>, which indicates the cost of managing the fund, and the <\/span>Asset Management Company (AMC)<\/b> managing the fund.<\/span><\/p>\n

 <\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t
Sr. No.<\/th>Fund<\/th>1 yr return<\/th>TER<\/th>AMC<\/th>\n<\/tr>\n<\/thead>\n
1<\/td>Invesco India Focused Growth Direct Plan<\/td>13.73%<\/td>0.58%<\/td>Invesco Mutual Fund<\/td>\n<\/tr>\n
2<\/td>HDFC Focused 30 Growth Direct Plan<\/td>12.94%<\/td>0.67%<\/td>HDFC Mutual Fund<\/td>\n<\/tr>\n
3<\/td>SBI Focused Equity Growth Direct Plan<\/td>12.44%<\/td>0.75%<\/td>SBI Mutual Fund<\/td>\n<\/tr>\n
4<\/td>ICICI Prudential Focused Equity Growth Direct Plan<\/td>10.26%<\/td>0.64%<\/td>ICICI Prudential Mutual Fund<\/td>\n<\/tr>\n
5<\/td>Bandhan Focused Equity Growth Direct Plan<\/td>9.96%<\/td>0.84%<\/td>Bandhan Mutual Fund<\/td>\n<\/tr>\n
6<\/td>DSP Focus Growth Direct Plan<\/td>8.98%<\/td>1.00%<\/td>DSP Mutual Fund<\/td>\n<\/tr>\n
7<\/td>Edelweiss Focused Growth Direct Plan<\/td>8.60%<\/td>0.69%<\/td>Edelweiss Mutual Fund<\/td>\n<\/tr>\n
8<\/td>Canara Robeco Focused Equity Growth Direct<\/td>7.85%<\/td>0.53%<\/td>Canara Robeco Mutual Fund<\/td>\n<\/tr>\n
9<\/td>Old Bridge Focused Equity Growth Direct Plan<\/td>6.99%<\/td>1.19%<\/td>Old Bridge Asset Management<\/td>\n<\/tr>\n
10<\/td>UTI Focused Growth Direct Plan<\/td>6.07%<\/td>0.68%<\/td>UTI Mutual Fund<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Source: Kuvera, 27 Feb, 2025<\/span><\/i><\/p>\n

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Top 10 Focused Funds Based on 3-Year Return<\/b><\/h3>\n

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The following table ranks the top focused funds based on <\/span>3-year returns<\/b>. HDFC Focused 30 Growth Direct Plan is the top performer with <\/span>25.07%<\/b>, followed by Invesco India Focused Growth Direct Plan at <\/span>20.85%<\/b>. The <\/span>TER (Total Expense Ratio)<\/b> values indicate the cost efficiency of managing these funds, which can impact net investor returns over the long term.<\/span><\/p>\n

 <\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t
Sr. No.<\/th>Fund<\/th>3 Yr Return<\/th>TER<\/th>AMC<\/th>\n<\/tr>\n<\/thead>\n
1<\/td>HDFC Focused 30 Growth Direct Plan<\/td>25.07%<\/td>0.67%<\/td>HDFC Mutual Fund<\/td>\n<\/tr>\n
2<\/td>Invesco India Focused Growth Direct Plan<\/td>20.85%<\/td>0.58%<\/td>Invesco Mutual Fund<\/td>\n<\/tr>\n
3<\/td>Mahindra Manulife Focused Growth Direct Plan<\/td>20.45%<\/td>0.44%<\/td>Mahindra Manulife Mutual Fund<\/td>\n<\/tr>\n
4<\/td>ICICI Prudential Focused Equity Growth Direct Plan<\/td>20.37%<\/td>0.64%<\/td>ICICI Prudential Mutual Fund<\/td>\n<\/tr>\n
5<\/td>JM Focused Growth Direct Plan<\/td>18.38%<\/td>0.78%<\/td>JM Financial Mutual Fund<\/td>\n<\/tr>\n
6<\/td>Quant Focused Growth Direct Plan<\/td>17.54%<\/td>0.67%<\/td>Quant Multi Asset, Multi Manager<\/td>\n<\/tr>\n
7<\/td>DSP Focus Growth Direct Plan<\/td>16.67%<\/td>1.00%<\/td>DSP Mutual Fund<\/td>\n<\/tr>\n
8<\/td>Franklin India Focused Equity Growth Direct Plan<\/td>16.33%<\/td>0.98%<\/td>Franklin Templeton<\/td>\n<\/tr>\n
9<\/td>Canara Robeco Focused Equity Growth Direct Plan<\/td>16.11%<\/td>0.53%<\/td>Canara Robeco Mutual Fund<\/td>\n<\/tr>\n
10<\/td>Tata Focused Equity Growth Direct Plan<\/td>15.91%<\/td>0.64%<\/td>Tata Mutual Fund<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Source: Kuvera, 27 Feb, 2025<\/span><\/i><\/p>\n

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Who Should Invest in Focused Funds?<\/b><\/h2>\n

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Focused funds can be better for investors who possess the following:<\/span><\/p>\n