Definition of Focused fund:
Mutual funds are often marketed as a good way to diversify a portfolio of investments. Indeed, most mutual funds are designed to hold a position in a large number of companies, with various pre-defined weights, saving the investor the trouble of selecting each security individually. This diversification allows an investor to gain access to the equity risk premium while minimizing risk and volatility.
A focused fund is a mutual fund that holds a only relatively small variety of stocks or bonds that are similar along some dimension. By definition, a focused mutual fund focuses on a limited number stocks in a limited number of sectors, rather than holding a broad or diversified mix of positions. Focused funds tend to hold positions in roughly 20-30 companies or less, unlike many funds which hold positions in well more than 100 companies.
A mutual fund that holds large positions in fewer than 30 stocks or in fewer than three sectors. Compare to a Diversified Fund.
How to use Focused fund in a sentence?
- A sector fund, for instance, will hold only stocks that are in a particular industry segment and have been carefully researched for inclusion.
- A focused fund is a category of mutual fund that invests in a small number of securities that are each related in some way.
- Focused funds give pinpointed market exposure, rather than a broad diversified portfolio.
Meaning of Focused fund & Focused fund Definition