Top 4 Focused Mutual Funds with Gains of Over 50%

Participation in mutual funds has been increasing over time, with investors becoming more knowledgeable about the various categories available. Among these, focused mutual funds, though not always in the spotlight, have shown a steady rise in their Assets Under Management (AUM) year over year.

Understanding Focused Mutual Funds

A focused mutual fund is a type of equity fund that adheres to a concentrated investing approach. According to SEBI guidelines, a focused fund can hold no more than 30 stocks in its portfolio, with at least 65% of its net assets invested in equities and equity-related instruments. This concentration allows for more in-depth research and potentially higher returns from each stock.

As of March 2024, the AUM of focused mutual funds stands at ₹1,29,704 crore, a significant increase of 31.4% from ₹98,673 crore in March 2023 (Source: AMFI). This growth reflects the increasing interest and confidence among investors in this category.

Top Performing Focused Mutual Funds

Here are the top-performing focused mutual fund schemes that have achieved gains of over 50% in the last year:

Source: MoneyControl as of May 17, 2024.

Invesco India Focused Fund

The Invesco India Focused Fund has 92.94% of its investments in domestic equities, with a distribution of 35.12% in large-cap stocks, 13.36% in mid-cap stocks, and 7.41% in small-cap stocks. The fund’s expense ratio is 1.94%, and it has delivered a remarkable return of 66.01% over the past 12 months, making it the top performer in this category. ICICI Bank is the fund’s top holding.

JM Focused Fund

With 98.67% of its investments in domestic equities, the JM Focused Fund allocates 32.89% to large-cap stocks, 28.3% to mid-cap stocks, and 11.32% to small-cap stocks. Despite having a relatively modest AUM of ₹97.81 crore, the fund has provided a robust return of approximately 54% over the past year. ABB Power Products and Systems India is the fund’s top holding.

Mahindra Manulife Focused Fund

The Mahindra Manulife Focused Fund has 96.83% of its investments in domestic equities, with 76.17% in large-cap stocks, 13.47% in mid-cap stocks, and 5.69% in small-cap stocks. Over the last 12 months, the fund has delivered returns of 50.7%. The fund’s expense ratio stands at 2.07%, with ICICI Bank as its top holding.

Quant Focused Fund

The Quant Focused Fund invests 77.08% in domestic equities, distributed among 42.05% in large-cap stocks, 12.89% in mid-cap stocks, and 5.73% in small-cap stocks. Additionally, the fund has a 6.96% investment in debt, primarily government securities. With an AUM under ₹1,000 crore, the fund has achieved over 50% returns in the past year. Reliance Industries is the top holding of the fund.

Conclusion

Focused mutual funds, with their concentrated investment strategy, have demonstrated significant growth and impressive returns. As investors continue to seek high-performing investment opportunities, focused mutual funds are gaining traction. The top-performing schemes highlighted above showcase the potential benefits of investing in this category, offering substantial returns and strategic equity investments.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.