Focused funds are for investors seeking alpha: Should you invest?

Consider these funds after you have a core portfolio in place

UTI Mutual Fund’s (MF's) new fund offer for a focused equity fund is on at present (it closes on August 18). The focused category has 27 funds with total assets under management of Rs 77,747 crore. According to the Securities and Exchange Board of India’s definition, these funds can invest in up to 30 stocks, and must have at least 65 per cent of their assets in equities. 

Promise of outperformance  

These funds have the potential to generate alpha (outperformance over their benchmark). The fund houses put their high-conviction ideas into the portfolios of these funds. Fund managers are also able to