If you plan to invest in a mutual fund scheme and are clueless as to where should you invest then you are not alone.
After you have already shortlisted a category of scheme, the next challenge is to select one mutual fund scheme within that category over others.
Here, we share details on focused mutual funds and shortlist the schemes that have delivered high returns in the past five years.
Focused mutual fundsThese are equity mutual funds that are focused on the number of stocks (maximum being 30) with at least 65 per cent of assets invested in equity and equity-related instruments, as per the Sebi’s categorisation of mutual funds.
The top-performing focused mutual funds have delivered annualised returns in the range of 17 to 22 per cent.
If you plan to invest in a mutual fund scheme and are clueless as to where should you invest then you are not alone. It is natural to be in a dilemma over opting for one scheme over the other, particularly when all appear similar, if not the same.
After you have already shortlisted a category of scheme, the next challenge is to select one mutual fund scheme within that category over others.
Although there are several criteria for selecting one mutual fund scheme by retail investors, most investors give disproportionately greater importance to the scheme’s historical returns in the past 5 years or so.
Here, we share details on focused mutual funds and shortlist the schemes that have delivered high returns in the past five years.
First, let us understand what are focused mutual funds.
Focused mutual funds
These are equity mutual funds that are focused on the number of stocks (maximum being 30) with at least 65 per cent of assets invested in equity and equity-related instruments, as per the Sebi’s categorisation of mutual funds.
The top-performing focused mutual funds have delivered annualised returns in the range of 17 to 22 per cent.
Focused mutual funds 5-year-returns (%) ₹ 1 lakh becomes Quant Focused Fund 22.06 ₹ 2.70 lakh 360 ONE Focused Equity Fund 21.66 ₹ 2.66 lakh ICICI Prudential Focused Equity Fund 19.59 Rs 2.44 lakh HDFC Focused 30 Fund 19.14 Rs 2.40 lakh Franklin India Focused Equity Fund 18.36 Rs 2.32 lakh Sundaram Focused Fund 17.89 Rs 2.27 lakh
(Source: AMFI; returns as on April 12, 2024)
As the table above shows, the highest returns of 22.06 percent are given by Quant Focused Fund followed by 360 One Focused Equity Fund which gave 21.66 percent return. Other top-performing schemes have given returns in the range of 17-19 percent.
For the perspective, let us understand how much exactly one stands to earn when a scheme gives a return of 22 percent per annum. If someone had invested ₹one lakh five years ago in the scheme, the investment would have grown to ₹2.70 lakh.
Likewise, if someone had invested ₹one lakh in a scheme which gave 21.66 percent return, it would have grown to ₹2.66 lakh.
Similarly, a similar investment in Sundaram Focused Fund would have grown to more than double at ₹2.27 lakh.
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