Focused funds are a type of mutual fund that invests in a limited number of stocks, unlike diversified equity funds.

These funds typically hold 20-30 stocks or fewer, compared to other mutual funds that may invest in over 100 companies.

Investments are often concentrated in select sectors with high growth potential rather than spread across multiple industries.

Also known as “best idea funds,” they focus on carefully chosen, high-conviction stocks.

The primary objective of focused mutual funds is to generate maximum returns by investing in high-performing companies.

Focused mutual funds are investment schemes that hold a limited number of stocks, concentrating their portfolio on carefully researched equity and debt instruments. Unlike diversified funds, these funds intentionally limit the number of holdings to capitalize on high-conviction investment ideas backed by in-depth research.

Due to their concentrated nature, returns from focused funds tend to be more volatile. They carry higher risk compared to broadly diversified mutual funds, but they also offer the potential for higher returns. Focused funds are also referred to as concentrated funds or under-diversified funds, making them suitable for investors with a higher risk appetite seeking enhanced growth opportunities.

1. Limited Portfolio of Stocks
   Focused mutual funds invest in a maximum of 30 stocks, allowing fund managers to build a high-conviction portfolio. This approach involves carefully selecting a small number of companies with strong growth potential rather than spreading investments across many stocks.
2. No Restrictions on Investment Choices
   These funds have the flexibility to invest in any company, regardless of sector or market size. Focused funds can include large-cap, mid-cap, and small-cap stocks, giving fund managers the freedom to allocate investments where they see the best opportunities.
3. Multi-Cap Style with a Focused Approach
   While focused funds operate similarly to multi-cap mutual funds, they differ by maintaining a smaller and more concentrated portfolio. This strategy aims to maximize returns through selective stock picking backed by thorough research.

A focused fund is a type of mutual fund that invests in a limited number of carefully selected securities that share a common theme or investment idea. Instead of offering broad diversification, focused equity funds aim to provide targeted market exposure by concentrating investments in a small set of well-researched stocks.

The main objective of a focused mutual fund is to maximize returns by investing in high-performing assets aligned with a specific investment strategy. Due to this high-conviction approach, focused funds are often referred to as best-concept funds, making them suitable for investors who are comfortable with higher risk in pursuit of potentially higher rewards.

1. You can invest in these funds either directly through Asset Management Companies or easily via the Retail Pe platform.
2. Simply sign up on the Retail Pe app, complete your KYC, and begin investing.

1. Higher Return Potential
   Although focused mutual funds carry a higher level of risk, they also offer the potential to generate strong returns. By concentrating investments in a limited number of high-quality stocks, investors may be able to maximize capital gains when these selected companies perform well.
2. Overcoming Traditional Mutual Fund Limitations
   Unlike diversified mutual funds that invest across many companies and sectors—including underperforming ones—focused funds invest only in carefully chosen stocks. This selective approach helps reduce the impact of weak-performing investments, allowing the portfolio to stay aligned with high-growth opportunities.
3. Targeted Exposure to High-Quality Stocks
   Focused funds invest in no more than 30 companies, which requires fund managers to conduct deep research and detailed analysis before making investment decisions. This disciplined stock selection process increases the likelihood of including top-performing companies, giving investors a chance to earn returns that can outperform the broader market.

Long-Term Capital Gain - 10% Without Indexation (less than Rs 1 lakh.)

Short Term Capital Gains – 15%