What Is A Focused Equity Mutual Fund SIP: What Are The Types Of Focused Equity Mutual Fund?

The focused equity mutual funds will invest the money of retail investors, predominantly in company stocks, listed in the equity markets. According to the SEBI rule, at least 65% of the assets must be invested in the equities and equity-related instruments in the case of focused equity mutual funds. On the other hand, a debt-oriented hybrid fund will invest above 65% in debt securities and the remaining in equity. You can either invest in lump sum or SIPs for the focused equity mutual funds. Under these funds, your investment can be value-oriented or growth-oriented.

The focused equity mutual funds can invest in any large-cap, mid-cap, small-cap, or multi-cap companies, depending on their market capitalization. Additionally, these funds can explore different sectors without any restriction, like finance, FMCG, chemicals, refinery, healthcare, pharma, technology, IT, etc.

The focused equity mutual fund SIPs can offer the investors considerable capital appreciation over a medium to long-term investment timeline. However, the focused equity funds are quite volatile; as the stock market performs, these funds will perform according. With the ups and downs of Sensex and Nifty, the returns from these funds will vary.

Types Of Focused Equity Funds

Multi-Cap Fund, Large Cap Fund, Mid Cap Fund, Large & Mid Cap Fund, Small Cap Fund, Dividend Yield Fund, Value Fund, Contra Fund, Focused Fund, Sectoral Fund, and ELSS (Equity Linked Savings Scheme) are the types of focused equity mutual funds.

Crisil Rated Focused Equity Funds

SBI Focused Equity Fund - Direct Plan, and IIFL Focused Equity Fund - Direct Plan are two best-rated (5 star) Focused Equity Funds by reputed rating agency Crisil. ICICI Prudential Focused Equity Fund - Direct Plan is a 4 star rated fund, and Franklin India Focused Equity Fund - Direct Plan is a 3 star rated fund by Crisil.

(Also read: Best Rated Focused Equity Mutual Fund SIP, Marked Upto 144% Returns: Crisil)

In Focused Equity Funds, for an investment of less than 1 year, you will be taxed with short-term capital gains; while for an investment of more than 1 year in the same fund, you will be taxed with long-term capital gains, according to government regulation.