Best Focused Funds List in India: Meaning, Benefits & Taxability
Mutual funds present a viable opportunity to diversify portfolios. With several mutual fund schemes and types, you can choose the right investment based on your investment goal, risk appetite, investment amount, tenure, etc. Today, we will talk about focused funds, a type of equity mutual fund known for its unique characteristics and potential returns. Let’s begin to understand focused funds in terms of benefits, drawbacks, suitability and investment considerations.
Top 10 Focused Funds in 2025
| Fund Name | AUM (in Cr.) | CAGR 3Y (%) | Expense Ratio (%) |
|---|---|---|---|
| HDFC Focused 30 Fund | 15,520.74 | 25.62 | 0.6 |
| Invesco India Focused Fund | 3,443.24 | 22.83 | 0.58 |
| JM Focused Fund | 211.91 | 22.47 | 0.78 |
| Mahindra Manulife Focused Fund | 1,879.96 | 21.70 | 0.42 |
| ICICI Pru Focused Equity Fund | 9,944.67 | 21.39 | 0.59 |
| Bandhan Focused Equity Fund | 1,792.58 | 19.22 | 0.82 |
| Tata Focused Equity Fund | 1,870.04 | 18.57 | 0.61 |
| Quant Focused Fund | 1,117.91 | 18.56 | 0.66 |
| Franklin India Focused Equity Fund | 12,183.26 | 18.35 | 0.94 |
| Canara Rob Focused Equity Fund | 2,553.50 | 17.74 | 0.5 |
Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.
Note: The data on the top focused funds in India is from 2nd January, 2025, and is derived from the Tickertape Mutual Fund Screener.
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Best Focused Funds 2025: Overview
Let’s look at the top 5 focused mutual funds to invest in 2025.
HDFC Focused 30 Fund
Managed by HDFC Asset Management Company, a joint venture between Housing Development Finance Corporation (HDFC) and Standard Life Investments (SLI), this fund targets long-term capital appreciation and income through investments in up to 30 companies. It operates with an expense ratio of 0.60%, which represents the annual fund management cost. Investors exiting within the specified period incur an exit load of 1.00%. The fund’s Sharpe ratio of 1.74 reflects its risk-adjusted performance, balancing return potential with associated risks.
Invesco India Focused Fund
This fund is managed by Invesco, a global investment management firm headquartered in Atlanta, Georgia, with a presence in 25 countries and over 8,000 employees worldwide. It aims to generate capital appreciation by investing in up to 20 stocks across market capitalisations. The fund’s expense ratio of 0.58% is among the lowest in its category, and an exit load of 1.00% applies for early redemptions. A Sharpe ratio of 2.14 highlights its high risk-adjusted returns relative to its peers.
JM Focused Fund
Offered by JM Financial Asset Management, one of India’s earliest private mutual fund providers, this fund seeks long-term growth by investing in equity and equity-related instruments across market capitalisations, focusing on up to 30 companies. The fund’s expense ratio of 0.78% is slightly higher compared to its peers, while its exit load of 1.00% aligns with standard industry practices. The fund has a Sharpe ratio of 1.23, indicating moderate risk-adjusted returns.
Mahindra Manulife Focused Fund
Managed by Mahindra Asset Management Company, this fund invests in a concentrated portfolio of up to 30 companies across market capitalisations. It has the lowest expense ratio of 0.42%, making it a cost-efficient option for investors. The fund levies an exit load of 1.00% for early withdrawals, and its Sharpe ratio of 1.10 reflects a conservative risk-return profile compared to its peers.
ICICI Pru Focused Equity Fund
Managed by ICICI Prudential Asset Management, a joint venture between ICICI Bank and Prudential Plc, this fund focuses on a concentrated portfolio of up to 30 companies with exposure across market capitalisations. Its expense ratio of 0.59% represents competitive fund management costs, and an exit load of 1.00% applies for early exits. The Sharpe ratio of 1.70 indicates strong risk-adjusted performance.
Investing in Focused Funds via smallcase
Did you know that you can invest in readymade focused funds portfolios managed by SEBI-registered experts? Yes, that’s right.
You can utilise a reliable platform like smallcase to keep track of market trends and the fund’s financial performance. smallcases are modern investment products that help investors invest in stock/ETF portfolios curated to represent a theme, strategy or objective. SEBI-registered financial professionals build these with years of experience in the stock markets.
Therefore, among 500+ smallcases, here are some of the top focused fund smallcases:
Note: These smallcases are mentioned only for educational purposes and are not meant to be recommendatory. Investors must conduct their own research and consult a financial expert before making any investment decisions.
Disclosures for Mid and Small Cap Focused Portfolio
Disclosures for BM Focused Small Cap
However, if you’re confused about which stocks to pick, you can explore smallcases:
- smallcases are readymade portfolios of stocks/ETFs, that are based on a theme idea or strategy
- They’re created and managed by SEBI-registered experts
- smallcase.com offers over 500+ stock portfolios, created by 180+ managers
- Some of the popular smallcases among new investors are as follows:
Disclosures for aforementioned smallcases
What are Focused Funds?
Focused funds are a type of equity mutual fund that invest in a limited or small variety of stocks and bonds. According to SEBI or the Securities and Exchange Board of India, focused equity mutual fund schemes invest in less than 30 companies to have a concentrated portfolio. Thus, as the name suggests, the focused fund can only focus on a maximum of 30 stocks.
This particular fund stands out due to its unique investment guidelines, unlike other funds that have the flexibility to invest in a maximum of 100 stocks. Focused funds may focus on large-cap, mid-cap or small-cap funds. Thus, the primary objective of a focused fund is to optimise returns by investing in top-performing assets.
How Does a Focused Mutual Fund Work?
As per the SEBI guidelines, focused funds allocate at least of 65% of their assets to equity and equity-related instruments. Unlike large-cap, mid-cap, or small-cap funds, these mutual funds are not restricted to specific market capitalisations. A focused fund can have exposure to a maximum of 30 stocks, so there is no restriction on where it can invest. However, in technical terms, it is known as running a concentrated portfolio with limited stocks.
Focused funds, therefore, can be potentially volatile, especially during the short term, since they are equity-oriented. Additionally, a lower number of stocks can potentially lead to high concentration risks for investors. So, this type of investment is suitable for investors who have a high risk tolerance and long-term investment horizon to avoid short-term market volatility.
Features of Focused Funds
The features of the focused mutual funds in India are:
- Limit on Equity Investments: According to the Securities and Exchanges Board of India (SEBI), focused funds can strictly invest in 30 or less equity funds. Thus, Fund managers can choose the best 30 focused mutual fund schemes after doing their own research.
- Portfolio Diversification Across Sectors & Market Cap: Focused funds can be used to make investments in any company. This means they can own stocks from various market capitalisations, which allows investors to maintain a diversified portfolio even if the number of funds is limited.
- Long Term Horizon: Since focused mutual funds are equity-oriented, they can be considered suitable for achieving long-term goals such as buying a house, investing in children’s education and even retirement planning.
Benefits of Investing in the Best Focused Equity Funds
Let’s look at the benefits of investing in the best focused funds.
- Potential to Generate High Returns: Fund managers conduct research and select 30 stocks that demonstrate strong performance or exhibit potential for future growth. They also ensure adequate asset allocation. Additionally, a diversified equity-oriented fund also helps in minimising risk exposure.
- Exposure to Selected Stocks: Focused funds can only invest in 30 stocks, making it crucial for fund managers to handpick stocks carefully. Thus, if the picks are right, the upside of the investments can be higher.
- Diversification: Although these funds maintain a focused portfolio of up to 30 stocks, they have the flexibility to select these stocks from various sectors. This helps to prevent the portfolio from becoming overly concentrated in any specific sector.
Who Should Invest in Focused Funds?
As you may have noticed, choosing and investing in the maximum number of 30 companies in the fund requires a strategic approach. So below are some of the categories of investors who can consider investing in focused funds.
- Investors with Experience: Focused funds can be suitable for seasoned investors who are well-versed in the market. These funds tend to be more volatile than other mutual funds, as they respond swiftly to sector-specific developments, leading to potentially higher returns and greater risk.
- Investors with Long Investment Horizon: Investors aiming for long-term growth can consider investing in focused mutual funds. These funds concentrate their portfolio on a limited number of stocks, typically 30 or fewer, allowing them to take high-conviction bets on companies they believe have strong growth potential.
- Investors Seeking Concentrated Portfolio: Focused funds can be a suitable option if you prefer to concentrate your investments in specific sectors or themes rather than diversify across various company types or industries.
- Investors Seeking for Potentially Higher Returns: For risk-tolerant investors, focused funds offer the potential for maximum returns despite the higher risks involved.
Factors to Consider While Investing in Focused Funds
Here are some of the factors to consider while investing in the focus mutual funds:
- Risk: Focused mutual funds run a concentrated portfolio of a maximum of 30 stocks. This lack of diversification is the primary source of risk associated with these funds, making them inherently riskier compared to diversified mutual funds such as multi-cap funds.
- Cost: The expense ratio depicts the overall annual expenses of managing a mutual fund. Select funds that have low expense ratios, as this can affect the returns. The higher the expense ratio, the lower the returns.
- Market Condition: Economic and market conditions can potentially influence fund performance. It is advisable to assess the present market cycle and its compatibility with the fund’s investment strategies.
- Investment Horizon: Given that focused funds typically invest in a restricted number of stocks, the fund may experience short-term volatility. Therefore, this option may not be ideal if your investment horizon is short. The investment horizon should be at least 5 years or more.
Potential Risks of Investing in Focused Equity Funds
Now that we have covered benefits, let’s examine the potential risks associated with focused mutual funds.
- Higher Risk: The concentrated portfolio composition of focused funds inherently carries risk compared to Diversified Funds. Thus, fluctuations in the performance of key stocks within the portfolio can significantly impact the fund’s overall performance.
- Short-term Volatility: In the short term, these investments may exhibit fluctuations in returns due to the limited number of stocks within the portfolio.
Tax Implications on Focused Mutual Funds
The taxation of focused funds aligns with that of other equity funds. If investments are held for over a year, resulting gains are categorised as Long-Term Capital Gains (LTCG) and subject to a 10% tax rate, applicable when annual gains surpass Rs. 1 lakh. However, selling holdings within a year incurs Short-Term Capital Gains (STCG) taxed at a rate of 15%.
To Wrap It Up…
Focused funds are equity-oriented mutual fund schemes that focus on a limited number of stocks. This opens up an opportunity for fund managers to invest in any best-performing stocks belonging to any sector or market capitalisation. As an investor, one can be assured in terms of portfolio diversification. However, this fund also carries a few potential risks to consider before investing.
Most Popular Mutual Funds:
As an investor to have a diversified mutual funds portfolio, you might also like to know more about these different types of funds for investing –
Frequently Asked Questions (FAQs) on Focused Funds
‘Best Idea Funds’ or ‘Focused Funds’ meaning is that they focus on running a concentrated portfolio of 30 stocks. They provide market exposure to deliver maximum returns by investing in high-performing assets.
Based on the 3Y CAGR, the top focused mutual funds to invest are:
(a) HDFC Focused 30 Fund
(b) Mahindra Manulife Focused Fund
(c) Invesco India Focused Fund
(d) JM Focused Fund
(e) ICICI Pru Focused Equity Fund
Note: This is for educational purposes, and is not recommendatory.
Yes, you can invest in focused funds in the form of systematic or lumpsum investments as per funds availability and your overall investment strategy.
There is a clear difference between the two funds. Unlike large-cap funds that invest in large-cap stocks and value funds that invest in undervalued stocks, focused funds have no such restrictions. The fund manager can make a concerted portfolio of 30 stocks in different sectors.
No, focused funds do not have a lock-in period. You can redeem your investments anytime. However, to maximise potential returns, it is advisable to stay invested in this fund for at least 5 to 7 years.
