How is a focused multicap fund different from a regular multicap fund?
- Noothi
All focused funds have fewer stocks. Their mandates claim that they invest in a specific number of stocks like 15, 20 or 25 stocks. By norm, they cannot have more than 30 stocks. These funds; however, come with their own set of risk and returns potential. If you go right with your focused strategy or if you're right with the stocks in your focused portfolio, then it turns out to be much more meaningful. Regular multicap funds, on the other hand, tend to be more diversified and have somewhere around 40 or 50 stocks.
This article was originally published on June 09, 2020.
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