Focused Mutual Funds: Taxability, Benefits and Risks
Focused mutual funds are one of the many types of mutual funds available in India. Unlike regular equity funds that hold a wide mix of stocks, focused funds invest in a concentrated portfolio of up to 30 stocks. This limited-stock approach allows fund managers to take high-conviction positions across companies. SEBI categorises focused funds separately and clearly states they can hold no more than 30 stocks. This article covers the top 10 focused mutual funds in India, along with their AUM, 3Y and 5Y CAGR, NAV, and more.
Top Focused Mutual Funds in India
Here is a list of the top 10 equity focused funds in India. These schemes follow a concentrated investing approach and hold no more than 30 stocks, as defined by SEBI.
| Name | AUM (Rs. in cr.) | CAGR 5Y(% | CAGR 3Y(%) | Expense Ratio(%) | NAV (₹ per unit) | Volatility(%) |
|---|---|---|---|---|---|---|
| HDFC Focused Fund | 25140.43 | 29.45 | 22.4 | 0.57 | 268.67 | 10.54 |
| ICICI Pru Focused Equity Fund | 12909.18 | 26.38 | 23.11 | 0.59 | 109.43 | 12.98 |
| Franklin India Focused Equity Fund | 12668.75 | 23.61 | 16.34 | 0.95 | 123.6 | 12.55 |
| Invesco India Focused Fund | 4453.93 | 23.58 | 23.28 | 0.59 | 29.75 | 15.38 |
| Quant Focused Fund | 975.16 | 22.66 | 15.48 | 0.75 | 96.22 | 15.72 |
| Nippon India Focused Fund | 8712.11 | 22.05 | 14.85 | 1.14 | 135.16 | 13.16 |
| Kotak Focused Fund | 3696.84 | 20.71 | 16.95 | 0.55 | 28.91 | 13.49 |
| JM Focused Fund | 309.55 | 20.67 | 19.66 | 0.74 | 23.81 | 15.8 |
| Tata Focused Fund | 1818.76 | 20.48 | 15.56 | 0.64 | 25.87 | 14.2 |
| 360 ONE Focused Fund | 7279.6 | 20.25 | 16.41 | 0.81 | 53.73 | 13.66 |
Disclaimer: Please note that the above list of the high-return focused mutual funds 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 Mutual Fund Screener and is subject to real-time updates.
Note: The data on the list of the best focused funds is from 10th November 2025. This data is derived from the Tickertape Mutual Funds Screener.
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Overview of the Best Focused Funds in India
HDFC Focused Fund
HDFC Focused Fund invests in a concentrated portfolio of up to 30 stocks across sectors and market caps. The scheme uses a high-conviction approach backed by business quality and long-term fundamentals.
ICICI Pru Focused Equity Fund
ICICI Prudential Focused Equity Fund, introduced in 2013, holds a compact basket of stocks selected through top-down and bottom-up research. It spreads ideas across market segments while focusing on durable business strength.
Franklin India Focused Equity Fund
Franklin India Focused Equity Fund, launched in 2007, invests in a limited number of companies with strong business models. Its stock selection relies on deep research and competitive positioning.
Invesco India Focused Fund
Invesco India Focused Fund builds a portfolio of up to 30 stocks chosen through fundamental research. It invests across sectors and market caps with an emphasis on sustainable earnings.
Quant Focused Fund
Quant Focused Fund follows a high-conviction style guided by data-driven models. The fund adjusts allocations dynamically based on market signals and fundamental trends.
Nippon India Focused Fund
Nippon India Focused Fund invests in a limited set of companies using a mix of thematic ideas and bottom-up research. It focuses on consistency in earnings and long-term value creation.
Kotak Focused Fund
Kotak Focused Fund, introduced in 2019, maintains a restricted portfolio across large, mid and small caps. The strategy centres on strong cash flows, scalable business models and stable fundamentals.
JM Focused Fund
JM Focused Fund, launched in 2008, holds a compact set of high-conviction stocks backed by sector and company research. It looks at sustainable growth drivers and efficient capital allocation.
Tata Focused Fund
Tata Focused Fund builds a concentrated portfolio using long-term earnings strength, competitive advantages and governance quality as key filters.
360 ONE Focused Fund
360 ONE Focused Fund invests in a curated list of companies with durable strengths and predictable earnings. It takes a research-led, conviction-driven approach within the 30-stock limit.
What are Focused Funds?
Focused mutual funds in India are equity funds that invest in a limited number of stocks. The idea is simple: instead of spreading money across many stocks, the fund takes concentrated positions in a smaller set of high-conviction ideas. SEBI categorises focused funds separately and clearly states they can hold no more than 30 stocks. They can invest across large-cap, mid-cap, and small-cap companies.
Tax on Focused Mutual Funds
The taxation on focused mutual funds follows the equity mutual fund tax rules in India. Here is a simple breakdown:
| Capital Gains Type | Holding Period | Tax Rate |
| Short-Term Capital Gains (STCG) | Less than 12 months | 20% |
| Long-Term Capital Gains (LTCG) | More than 12 months | 12.50% |
Features of Focused Funds
- Concentrated Portfolio: Focused funds invest in a maximum of 30 stocks, as mandated by SEBI. This makes the portfolio more concentrated than regular diversified equity funds.
- Multi-Cap Flexibility: These funds can invest across large-cap, mid-cap and small-cap companies, giving the fund manager freedom to choose stocks from any segment.
- High-Conviction Approach: Since the number of holdings is limited, the fund manager selects only high-conviction ideas based on research, business strength and long-term potential.
Focused Mutual Fund Benefits
- High-Conviction Portfolio Structure: Equity focused funds are restricted to a maximum of 30 stocks, which means each stock is included only after strong research and conviction. This structure gives clearer visibility into the companies that drive the fund’s outcomes.
- Flexibility to Pick Stocks Across Market Caps: These funds are not limited to one category. They can invest in large-cap stability, mid-cap growth potential, or small-cap emerging businesses. This flexibility helps the fund capture a wide range of market opportunities.
- Strong Impact from Well-Performing Stocks: With higher stock-level allocation, strong performers can influence the overall returns more significantly. This can shape the fund’s performance when chosen businesses do well.
Risks of Investing in the Focused Equity Funds
- Higher Concentration Risk: Focused funds hold up to 30 stocks, which increases dependence on a smaller set of companies. If one or more of these stocks perform poorly, the overall portfolio can feel the impact more than a diversified fund.
- Increased Volatility: With a compact portfolio, price movements in individual stocks can lead to sharper ups and downs. This may result in higher short-term volatility compared to broader equity funds.
- Stock Selection Risk: Focused fund performance relies heavily on the fund manager’s research and stock-picking ability. Any misjudgment in assessing a company’s fundamentals, earnings strength or management quality can influence the fund’s outcomes.
- Sector Concentration Possibility: Even though focused funds can invest across sectors, some may lean more towards specific industries. A sector-heavy approach can heighten the impact of industry-specific slowdowns.
- Market-Driven Risk: Like all equity schemes, focused funds are affected by broader market conditions. Economic changes, interest rate movements, global events or company-specific news can influence focused fund performance.
Factors to Consider While Investing in Focused Funds
- Portfolio Concentration: Focused funds hold a maximum of 30 stocks, so each company carries a higher weight. It helps to understand how concentrated the portfolio is and whether the allocation aligns with your comfort level.
- Sector Allocation Pattern: Some focused funds may lean toward specific sectors based on their strategy. Checking how diversified the portfolio is across industries helps you understand exposure to sector-specific risks when exploring focused fund investment options.
- Market-Cap Mix: These funds can invest across large-cap, mid-cap and small-cap segments. The mix chosen by the fund influences volatility, risk and return patterns, so it’s helpful to review this balance.
- Investment Horizon Alignment: Focused funds can experience sharper swings because of stock concentration. Understanding whether the fund’s behaviour fits your time frame is useful before making any decision.
Who Should Consider Focused Equity Mutual Funds?
- Investors Who Prefer High-Conviction Portfolios: Those who like portfolios built around strong research-driven ideas, rather than broad diversification, may appreciate the clarity of a concentrated approach.
- Investors Who Understand Market-Cap Mix:These funds can invest across large, mid and small caps. Individuals who consider how market-cap exposure affects risk and behaviour may find this useful.
- Investors Comfortable With Concentration: People who understand that focused funds hold up to 30 stocks and are comfortable with higher stock-level exposure may find this category relevant.
- Experienced Investors: Focused funds can be suitable for seasoned investors who are well-versed in the market. These concentrated portfolio funds tend to be more volatile than other mutual funds, as they respond swiftly to sector-specific developments.
To Wrap It Up…
Focused equity funds operate with a clear structure, investing in a maximum of 30 stocks and relying heavily on research-driven stock selection. Their concentrated nature creates a portfolio where each company has meaningful weight, making the fund’s behaviour easier to understand but also more sensitive to market movements. Reviewing the fund’s strategy, sector allocation, and investment approach helps build a clearer picture of how it fits within an investor’s investment strategy.
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Frequently Asked Questions on Focused Mutual Funds
A focused mutual fund is an equity scheme that invests in a concentrated portfolio of up to 30 stocks, as defined by SEBI. The fund manager selects a limited number of high-conviction companies across market caps and sectors.
As of 10th November 2025, some of the best high-return focused mutual funds based on 5Y CAGR include:
– HDFC Focused Fund
– ICICI Pru Focused Equity Fund
– Franklin India Focused Equity Fund
– Invesco India Focused Fund
– Quant Focused Fund
Disclaimer: This list is for information and educational purposes only and is not recommendatory.
A focused fund limits its portfolio to a maximum of 30 stocks, regardless of the investment style used. A value fund, on the other hand, follows a value-based investing approach, selecting stocks that appear undervalued compared to their intrinsic worth.
Yes, most focused equity mutual funds offer the option to invest through a Systematic Investment Plan (SIP). An SIP allows you to invest a fixed amount at regular intervals instead of making a lump-sum contribution.
Disclaimer: This information is for educational purposes only and should not be taken as investment advice
No, focused funds do not have a lock-in period. You can redeem your investments anytime. Some schemes may have an exit load if units are sold within a specific period, so checking the fund’s exit load structure is helpful.
