What is Focused mutual fund ? What are the different types of Focused mutual funds in India?

What is Focused mutual fund ?

A focused mutual fund is a type of mutual fund that invests in a limited number of stocks, typically between 20 to 30 stocks. Unlike diversified mutual funds, which invest in a broad range of stocks across different sectors, focused mutual funds concentrate on a smaller number of stocks that the fund manager believes have the highest potential for growth or return.

The objective of a focused mutual fund is to achieve higher returns by selecting a concentrated portfolio of stocks that the fund manager believes will outperform the market. However, the higher concentration of stocks also means that focused mutual funds have a higher degree of risk and volatility compared to diversified mutual funds.

Investors who choose to invest in focused mutual funds should have a higher risk tolerance and a long-term investment horizon. It is also important to carefully research the fund's investment strategy, portfolio holdings, and past performance before making an investment decision.

What are the different types of Focused mutual funds in India?

Focused mutual funds are a type of mutual fund in India that invests in a limited number of stocks, typically between 20 to 30, which are chosen based on the fund manager's assessment of market conditions and investment opportunities. Focused funds aim to provide higher returns than the broader market by focusing on a select number of high-quality stocks. Here are some different types of focused mutual funds in India:

    Multi-cap Focused Funds: Multi-cap focused funds are mutual funds that invest in stocks across market capitalizations, i.e., large-cap, mid-cap, and small-cap companies. These funds typically hold a concentrated portfolio of high-quality stocks selected based on the fund manager's assessment of market conditions and investment opportunities.

    Large-cap Focused Funds: Large-cap focused funds are mutual funds that invest primarily in large-cap stocks, i.e., stocks of companies with a market capitalization of over Rs. 10,000 crores. These funds typically hold a concentrated portfolio of high-quality large-cap stocks selected based on the fund manager's assessment of market conditions and investment opportunities.

    Mid-cap Focused Funds: Mid-cap focused funds are mutual funds that invest primarily in mid-cap stocks, i.e., stocks of companies with a market capitalization between Rs. 5,000 crores to Rs. 20,000 crores. These funds typically hold a concentrated portfolio of high-quality mid-cap stocks selected based on the fund manager's assessment of market conditions and investment opportunities.

    Small-cap Focused Funds: Small-cap focused funds are mutual funds that invest primarily in small-cap stocks, i.e., stocks of companies with a market capitalization of less than Rs. 5,000 crores. These funds typically hold a concentrated portfolio of high-quality small-cap stocks selected based on the fund manager's assessment of market conditions and investment opportunities.

    Sectoral Focused Funds: Sectoral focused funds are mutual funds that invest in stocks of companies within a specific sector, such as technology, healthcare, or infrastructure. These funds typically hold a concentrated portfolio of high-quality stocks within the chosen sector, selected based on the fund manager's assessment of market conditions and investment opportunities.

Investors should carefully consider their investment objectives, risk appetite, and investment horizon before investing in any mutual fund. It's always advisable to consult with a financial advisor before making any investment decisions.