Focused mutual funds: Only 4 schemes delivered 15%+ SIP returns in 5 years; Invesco India topped at 18.33%

Only four Focused funds have delivered SIP returns of more than 15% over five years, with Invesco India Focused Fund leading at 18.33%. Mirae Asset Focused Fund was at the other end with a 7.92% return.

Focused funds are equity mutual fund schemes that invest in a concentrated portfolio of up to 30 stocks. Unlike diversified equity funds, which spread investments across a larger number of companies, focused funds allow fund managers to take higher-conviction positions in a limited set of stocks.

This can make the performance of individual holdings have a larger impact on overall fund returns. The data also shows that fund size and recent performance do not necessarily translate into higher five-year SIP returns.

Invesco India Focused Fund delivered the highest five-year SIP return at 18.33%, followed by ICICI Prudential Focused Equity Fund at 16.73%. HDFC Focused Fund and SBI Focused Fund were the other two schemes to cross the 15% mark.

HSBC Focused Fund came closest to the 15% mark at 14.97%, followed by Kotak Focused Fund at 14.89% and Motilal Oswal Focused Fund at 14.82%.

Quant Focused Fund delivered a 13.98% five-year SIP return, while Mahindra Manulife Focused Fund posted 13.65%. DSP Focused Fund and Bandhan Focused Fund returned 13.21% and 13.17%, respectively.

At the lower end, Mirae Asset Focused Fund delivered 7.92%, followed by Franklin India Focused Equity Fund at 9.01% and Axis Focused Fund at 9.15%.

The gap between the highest and lowest five-year SIP returns was therefore 10.41 percentage points.

SBI Focused Fund is the largest scheme in the category by net assets, with ₹ 50,041 crore. However, its 15.27% five-year SIP return placed it fourth among the funds that crossed the 15% mark.

HDFC Focused Fund was the second-largest scheme, with ₹ 27,925 crore in net assets, and delivered a 16.18% five-year SIP return. ICICI Prudential Focused Equity Fund had ₹ 17,764 crore in assets and delivered 16.73%.

Invesco India Focused Fund, however, had net assets of ₹ 6,065 crore and topped the five-year SIP return chart with 18.33%.

The difference is also visible among other large focused funds. Franklin India Focused Equity Fund had ₹ 11,510 crore in net assets but delivered a 9.01% five-year SIP return. Axis Focused Fund had ₹ 11,315 crore in assets and delivered 9.15%.

Aditya Birla Sun Life Focused Fund, with ₹ 8,017 crore in assets, delivered 12.66%, while Nippon India Focused Fund, with ₹ 8,530 crore, returned 11.14%.

The data suggests that a larger asset base does not automatically translate into higher SIP returns.