Top Focused Mutual Funds for Investment in December 2024
Focused funds are one type of equity mutual fund that provides investors with exposure to a small number of stocks. As per the SEBI norms, these stocks can be invested in up to 30 stocks at one time.
Most of the investors trust that a concentrated portfolio will help them to get better returns. Those investors who believe that most mutual fund schemes provide average returns because they have a large diversified portfolio in this case, can consider investing in focused mutual fund schemes.
Focused equity mutual fund schemes have no restrictions at the time of investing; like flexicap schemes, they can invest in different market capitalizations and sectors.
Here are the top focused equity mutual funds for investment in December 2024:
- 360 ONE Focused Equity Fund
- SBI Focused Equity Fund
- Sundaram Focused Fund
- Quant Focused Fund
In these focused mutual fund schemes, the SBI Focused Equity Fund has been in the top fourth quartile for the past three months, and this scheme had been in the top third quartile before. Sundaram Focused Fund, which has been in the top fourth quartile for the past two months, and before the three months this scheme had been in the top third quartile.
These schemes have a concentrated portfolio. This means the fund manager will select stocks in which they highly believe and invest a significant amount in each stock.
If their choices are right, the returns can be good. However, if some picks don’t perform well, then the scheme can face significant losses. That is why there is the risk of investing in a concentrated portfolio.
If the manager identifies that the market capitalisations and stocks are ahead of the market, then it will be more beneficial for the scheme. If they choose the wrong stocks, then in that case the scheme will suffer more. This is the risk of having a portfolio that only has a few investments. Focused mutual fund schemes are suitable for those investors who are planning to invest for about seven years.
