Mutual Funds and Hedge Funds

Focused funds are funds which hold large positions in a small number of stocks. While many mutual funds hold 100 positions or more, focused funds usually have 10 to 40 positions at any given time. They emphasize quality over quantity, and would rather hold just the stocks they have the most confidence in, rather than diversifying across a large number of holdings. In theory this should enable them to more thoroughly research and track their holdings, although they lose the benefits of diversification and tend to be more volatile than other mutual funds.