New Delhi, June 23 -- Focused funds are equity mutual fund schemes that invest in a limited number of stocks, allowing fund managers to take concentrated bets. These funds are suitable for investors willing to take on higher risk to earn better returns from a quality-focused portfolio.

So, let's understand what focused funds are, how they work, the key factors to consider before investing, and the benefits and risks associated with them.

Under SEBI regulations, focused funds can invest in up to 30 stocks. Earlier, these schemes were required to invest at least 65% of their assets in equity and equity-related instruments. However, effective 1 April, 2026, SEBI revised the definition of focused funds.

Under the new rules:

The revised fr...