Focused Mutual Funds

What are the features of Focused Funds?

• Handpicked securities across a maximum of 30 companies

• Very high risk-return trade-off

• Diversification across market sectors and company size

• Suitable for investors who have some investing experience

• Earn tax-free returns up to ₹1 lakh if you stay invested

What is the meaning of Market Capitalisation?

What should be the investment horizon for Focused Funds?

• Focused Funds have a concentrated portfolio which makes them risky in the face of market volatility

• They are prone to short-term volatility which might yield negative investment returns

• To avoid short-term volatility, an investment horizon of at least 5 years is recommended

• A long-term horizon also helps earn attractive investment returns

• You also get a tax benefit on staying invested for a longer tenure

What is the tax implication of Focused Funds?

• Returns up to ₹1 lakh are tax-free if you stay invested for 12 or more months

• Returns exceeding ₹1 lakh are taxed at 10%

• For redemption within 12 months, returns are taxed at 15%

• Dividends earned, if any, are taxed at your income tax slab rate

What are the payout options?

• Dividend option

  Earn dividends on your investment at regular intervals

• Growth option

  Accumulate the returns over the investment tenure and get a lump sum amount on redemption