Focused Funds – Basics & More
Focused funds fall under the category of mutual fund investment that comprises of a fewer variety of stocks. Taking under this investment scheme, these funds are concentrated only on limited variation from a few sectors, instead of a mix and mixture of different equity positions. These funds hold a position in maximum of 30 companies, while others hold a position in more than 100 companies.
Focused funds are also known as best idea funds; the aim is to deliver maximum returns by investing in high-performing assets.
One of the benefits of investing in the mutual funds is to promote the diversity in equity investments. The majority of mutual funds invest in a large number of companies that have predetermined weights for saving investors from the inconvenience of selecting each security. This diversification helps an investor to maximize their returns while maintaining volatility and risks; not to miss, they can also give in certain cons.
Another primary purpose is to allocate holdings across a certain number of carefully researched debt and equity funds. However, these funds don’t offer the pros that come with the diversification of funds, they bang on the benefits that come with deep research for selecting stocks. Also, the returns from focused funds are more volatile.
The taxation on these funds is similar to that of other mutual funds. For example; these funds can invest in non-tax saving equity funds, tax-saving equity funds, SIP, debt funds, etc for a limited number of companies.
Who Should Invest?
Focused Funds are for individuals with a high-risk appetite and veteran investors. As mentioned, above, these funds are more volatile, thus, they are best suited for an investor(s) who are looking for a safe investment.
Despite being risky, focused funds are expected to gain more traction for the future. With a promise of high returns apart from mutual funds, they end up helping investors maximizing the gains from their investment(s).
A Quick take on Advantages
- Better Researched Investments
- Nullify Limitations of Mutual Funds
- High Returns
Top 10 FOCUSED FUNDS based on Gulaq Methodology. Here:
- AXIS Focused 25 Fund
- SBI Focused Equity Fund Direct Dividend Payout
- Sundaram Select Focus Direct Plan
- IIFL Focused Equity Fund Direct Plan – Dividend Payout
- IDFC Focused Equity Fund
- Motilal Oswal Focused 25 Fund
- Principal Focused Multicap Fund
- Aditya Birla Sun Life Focused Equity Fund
- DSP Focus Fund
- Franklin India Focused Equity Fund
Looking to invest? Hop on to gulaq.com and start investing in direct mutual funds. Furthermore, you can also get in touch: [email protected]
*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.