There is no standard definition for focused funds. The most common reference point is the number of individual stocks a fund holds. Generally, a focused fund will hold fewer than 40 stocks, and some of the most focused funds, such as Oakmark Select (OAKLX), hold around 20 names. Find how many stocks a fund holds by checking its portfolio in its shareholder report or looking at the Portfolio section of its Morningstar fund report.

Numbers aren't everything: A fund can also be considered focused if it concentrates a large percentage of its assets in its top five or 10 holdings. (This style is a common byproduct of investment strategies that also limit the fund's number of holdings to fewer than 40 stocks.) Columbia Acorn Select (LTFAX), for example, is considered a focused fund; as of March 2011, it devoted nearly one fourth of its assets to its five largest holdings.

Finally, focused can refer to a diversified fund's sector exposure. Some funds concentrate in only one or a few market sectors. For example, CGM Focus (CGMFX) invests a lot in some industries, such as technology and energy, and 0% in others, such as consumer defensive, health care, and utilities (as of March 2011). Sometimes, but not always, funds can become focused by sector because they own few individual stocks.

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