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Mahindra Manulife Mutual fund has launched ‘Focused Equity Yojana,’ an open-ended equity scheme, that will invest in maximum 30 stocks across market capitalisation. The scheme is suitable for investors with medium and long term capital appreciation with relatively better risk-adjusted return potential. The New Fund Offer will close on November 9.
Ashutosh Bishnoi, Managing Director, Mahindra Manulife Investment Management, said Indian economy and the equity markets are poised for a strong recovery, as the economy unlocks and corporate performance improves.
Own mix of m-caps
The focused funds have the advantage to define their own market cap mix and has the flexibility to find opportunities across equity segment, he said.
As per SEBI guidelines, a focused fund can invest in a maximum of 30 stocks unlike other equity MFs which typically hold 50-100 stocks. Some focused mutual funds also state their objective to focus on the large-cap or mid-cap stocks. Other funds do not specify any such category focus and follow a bottom-up stock selection investment strategy.
The objective of focused funds is to deliver high returns by investing in a limited number of quality companies with growth potential.
Though the objective of MFs is to provide optimal diversification beyond a limit, diversification becomes pointless and may lead to lower returns. The entire strategy of focused funds is to hit the bull’s eye with the right stocks selection and try to earn a high return.
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