Scroll Top


    Focused Fund


    A focused fund is a mutual fund which holds a relatively small number of stocks or bonds in some dimensions that are identical. Through definition, in a limited number of sectors, a concentrated mutual fund focuses on a limited number of stocks rather than holding a large or varied mix of positions.

    In comparison to many funds holding positions well over 100 companies, focused funds tend to hold positions in about 20-30 companies or less.

    What Does a Focused Fund Do?

    A focused fund is a mutual fund category that invests in a small number of securities that are in some way related to each other. For example, a sector fund will hold only stocks in a particular segment of the industry that has been carefully investigated for inclusion. Focused funds give precise exposure to the market rather than a broad portfolio of diversity.

    Focused funds divide their portfolios among a limited number of securities that have been carefully researched. Due to the "look for quality" approach, they do not experience the benefits of diversification.

    On the other hand, oriented funds rely on research skills for the above-average stock picking. Results appear to be more unpredictable. This fund is also termed as a "concentrated fund" or "under-diversified fund".

    Pros and Cons of a Focused Fund

    mutual funds are frequently marketed as a good way to diversify an investment portfolio. However, most mutual funds are designed to hold a position in a large number of companies, with different predefined weights, saving the investor the hassle of individually choosing and protection. This diversification makes it possible for an investor to access the equity risk premium while minimizing volatility and risk.

    Some investors, however, feel that diversification can also limit returns by spreading money from companies or multiple sectors, not all of which are likely to outperform simultaneously. If an investor feels strongly that a certain industry or sector will soon outperform, by concentrating investments in that sector, he or she can increase returns.

    Popular Topics

    Latest Articles

    Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

    Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

    CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

    Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

    Cleartax is a product by Defmacro Software Pvt. Ltd.

    Company PolicyTerms of use


    ISO 27001

    Data Center


    SSL Certified Site

    128-bit encryption