Only a few large-cap names have worked as an umbrella for fund managers and retail investors last year. The trend is likely to continue, given the general elections and persisting global volatility

Though mutual funds reduce volatility by investing in various securities (more than 100), there are funds which focus on key players based on growth and competitive advantage.

Fund managers of these funds limit the number of securities up to a certain limit. Hence, these funds are called focused funds.

In this article, we bring to you the 6 best focused funds to invest in for the year 2019.

Let’s begin!

6 Best Focused Fundas of 2019 - At a Glance
Fund Name 1Y 3Y 5Y Expense Ratio Turnover Ratio Category Risk
Axis Focused 25 Fund - Direct - Growth 4.06% 17.23% 15.93% 0.74% 60% Equity
(Focused)
Moderately High
JM Core 11 Fund - Direct - Growth 7.94% 16.27% 14.52% 2.18% 4% Equity
(Focused)
High
Sundaram Select Focus - Direct - Growth 9.75% 15.33% 10.84% 1.68% 90% Equity
(Focused)
Moderately High
SBI Focused Equity Fund - Direct - Growth 8.22% 15.46% 16.22% 1.23% 81% Equity
(Focused)
Moderately High
Aditya Birla Sun Life Focused Equity Fund - Direct - Growth 8.66% 12.57% 12% 1.11% 57% Equity
(Focused)
Moderately High
Motilal Oswal Dynamic Fund - Direct - Growth 3.87% NA NA 0.99% 461% Hybrid
(Balanced Advantage)
Moderately High

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Let us now discuss about all the funds in detail.

1. Axis Focused 25 Direct Fund

This fund has successfully beaten its benchmark over a period of time and its expense ratio stands low at 0.66%. Also, it has a decent AUM which reflects that the fund has potential to grow, going forward.

Wherein most other funds under this category have been in the negative territory, Axis Focused 25 Fund has provided investors with positive returns over the last year where the markets have been tumultuous.

This has been because of the higher portion of funds being invested in financials (more than 45 percent in the equity category).

Key Information

Launch Date 01 – Jan – 2013
NAV (22-Feb-2019) 27.3
Plan Type Direct
Ratings by Groww 5 Star
AUM (Fund Size) 6,511 crores
Riskometer Moderately High
Minimum SIP 1000
Performance wr.t. its Benchmark Has beaten its benchmark NIFTY 50 Total Return over long periods of time
Age of the Fund 6 years
Expense Ratio 0.66%
Exit Load For units in excess of 10% of the investment,1% will be charged for redemption within 12 months
Type Equity – Focused
Fund Manager Jinesh Gopani

Investment Objective

The investment objective of the fund is to generate long term capital appreciation by investing in a concentrated portfolio (i.e. equity and equity related instruments wherein the number of stocks doesn’t exceed 25)

Holding Analysis

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2.JM Core 11 Fund

This fund is being recommended for investors who want to take additional risk.

Looking at the AUM size of the fund, we can see that it is very low. Even SIP is not supported under this fund. Also, the expense ratio is on a higher side.

However, the fund invests in companies like, Titan, Asian Paints, Bajaj Finance, HDFC Bank Ltd., Larsen & Toubro Ltd. etc. which are market leaders, therefore this fund has generated exceptional returns for investors over the long run.

A good mix of financials (28%), consumer durables (19.4%), construction (17.6%) etc says that the fund managers are upbeat on India’s growth story.

Key Information

Launch Date 01 – Jan – 2013
NAV (22-Feb-2019) 9.2
Plan Type Direct
Ratings by Groww 5 Star
AUM (Fund Size) 35 crores
Riskometer High
Minimum SIP Not Supported
Performance wr.t. its Benchmark Has beaten its benchmark NIFTY 50 Total Return over long periods of time
Age of the Fund 6 years
Expense Ratio 2.18%
Exit Load Exit load is 1% if redeemed within 3 months
Type Equity – Focused
Fund Manager Asit Bhandarkar, Chaitanya Choksi

Investment Objective

The investment objective is to generate long term growth by investing in a concentrated portfolio of equity and equity related instruments.

Holding Analysis

3.Sundaram Select Focus – Direct – Growth

This fund is accessible to all retail investors as the SIP can be started with an amount as low as INR 250 per month;

The fund size is small (888 crores) and therefore there is huge potential for growth going forward;

The one year, as well as three-year returns, are greater than its benchmark S&P BSE Sensex TRI. At the same time, this return has been generated with lower amount of risk;

Top holdings are in marquee names such as Maruti Suzuki, HDFC Bank, HDFC Ltd., Infosys Ltd., ITC, Axis Bank Ltd., and RIL etc.

Key Information

Launch Date 01 – Jan – 2013
NAV (22-Feb-2019) 172.4
Plan Type Direct
Ratings by Groww 4 Star
AUM (Fund Size) 888 crores
Riskometer Moderately High
Minimum SIP 250
Performance wr.t. its Benchmark Has beaten the benchmark S&P BSE Sensex 50 TRI
Age of the Fund 6 years
Expense Ratio 1.74%
Exit Load Exit load is 1% if redeemed within 12 months
Type Equity – Focused
Fund Manager Rahul Baijal

Investment Objective

The investment objective of the fund is to achieve capital appreciation by investing in a very few selected stocks.

Holding Analysis

4.SBI Focused Equity Fund-Direct – Growth

The portfolio for SBI Focused Equity Fund has been able to beat the benchmark by sticking to its investment objective and making full use of the opportunities available for growth.

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Apart from putting money in top names such as HDFC Bank Ltd., SBI, Bajaj Finance Ltd., P&G, Divi’s Laboratories Ltd. etc, the fund managers have also put in money in Alphabet Inc Class A (a global company listed in USA) and other bets such as Hatsun Agro Products and Solar Industries Ltd. (under the Emergent category).

It also has approximately 20% CAGR returns,

Key Information

Launch Date 01 – Jan – 2013
NAV (22-Feb-2019) 135.7
Plan Type Direct
Ratings by Groww 4 Star
AUM (Fund Size) 3,452 crores
Riskometer Moderately High
Minimum SIP 500
Performance wr.t. its Benchmark Has beaten the benchmark S&P BSE 500 TRI
Age of the Fund 6 years
Expense Ratio 1.29%
Exit Load Exit load is 1% if redeemed within 1 year
Type Equity – Focused
Fund Manager Rama Iyer Srinivasan

Investment Objective

The investment objective of the fund is to provide investors with maximum growth opportunity through equity investments in stocks of growth oriented sectors of the economy.

The fund managers have divided the category into five sub-funds dedicated to specific investment themes which are:-

  • Information Technology;
  • Pharmaceuticals;
  • FMCG;
  • Contrarian (investment in stocks currently out of favour);
  • Emerging Businesses

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The fund managers may also evaluate emerging businesses with growth potential and domestic focus.

Holding Analysis

5. Aditya Birla Sun Life Focused Equity Fund-Direct – Growth

This fund is managed by Mr. Mahesh Patil, co-CIO of Aditya Birla Sun Life AMC.

He is one of the most recognized names in the industry and therefore the fund has delivered handsome returns. Not just this, the fund also has a very low expense ratio of 1.12% and the beta of the fund (0.90) is less compared to the benchmark.

Focusing only on top 100 companies such as Infosys, ITC, HDFC Bank Ltd., SBI, NTPC Ltd., Reliance Industries Ltd., the risk exposure is also less. Therefore, this fund is suitable for investors who have a long-term goal in mind.

Key Information

Launch Date 01 – Jan – 2013
NAV (22-Feb-2019) 58.2
Plan Type Direct
Ratings by Groww 4 Star
AUM (Fund Size) 3,946 crores
Riskometer Moderately High
Minimum SIP 1000
Performance wr.t. its Benchmark Has beaten the benchmark S&P BSE Sensex 50 TRI
Age of the Fund 6 years
Expense Ratio 1.13%
Exit Load Exit load is 1% if redeemed within 365 days
Type Equity – Focused
Fund Manager Mahesh Patil

Investment Objective

The investment objective of the fund is to achieve long term capital appreciation by investing in upto 30 companies from top 100 companies (large caps).

Holding Analysis


6. Motilal Oswal Focused 25 Fund – Direct – Growth

This fund has one of the lowest expense ratios (0.91%) in the equity-focused category. The AUM of the fund is decent at 1049 crores which points to the amount of growth that can be expected in the future.

Also, almost 60 percent of the equity portfolio is allocated in two sectors; financials (HDFC Bank Ltd., Kotak Mahindra Bank Ltd, ICICI Bank, HDFC Life Insurance Ltd. etc.) and Technology (TCS, Infosys); which shows that the managers are upbeat on the key growth-oriented themes.

Key Information

Launch Date 01 – Jan – 2013
NAV (22-Feb-2019) 21.6
Plan Type Direct
Ratings by Groww 4 Star
AUM (Fund Size) 1,049 crores
Riskometer Moderately High
Minimum SIP 500
Performance wr.t. its Benchmark Has beaten the benchmark S&P BSE Sensex 50 TRI
Age of the Fund 6 years
Expense Ratio 0.91%
Exit Load Exit load is 1% if redeemed within 15 days
Type Equity – Focused
Fund Manager Abhiroop Mukherjee, Gautam Sinha Roy, Siddharth Bothra

Investment Objective

The investment objective of the scheme is to generate long term capital appreciation by investing in upto 25 companies with long term sustainable competitive advantage and growth potential.

Holding Analysis

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Conclusion

These funds discussed above suit the needs of the investors for long term investment. The focused funds constraint the investments only to companies which pass through particular filters of growth and competitive advantage.

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Therefore, we as investors too can easily track our portfolio and see the fund performance anytime. Having a focused fund apart from other risky funds is advisable to meet our long term goals.

Happy Investing!

Disclaimer: The views expressed in this post are that of the author and not those of Groww