Parag Parikh Flexi Cap Fund Direct Growth

Parag Parikh Flexi Cap fund is the flagship fund of the PPFAS Mutual Fund and one of the most sought-after schemes in the flexi cap category. This fund invests in domestic stocks, US equities and debt. However, on average, 65% of its corpus is allocated to Indian stocks, allowing it to benefit from favourable capital gains tax treatment of equity. 

Parag Parikh Flexi Cap is one of the few funds in India that invest in a basket of domestic and foreign stocks. Through this unique investment approach, it aims to reduce portfolio volatility and country risk while offering a wide array of choices to investors. The fund’s stock selection is not limited by factors like sectors, market capitalisation and geographies.

Launched in 2013, it is an actively managed scheme with the aim to provide long-term capital growth. While PPFAS manages 6 schemes, its most popular fund remains Parag Parikh Flexi Cap. Its assets under management (AUM) of over Rs 65,000 crore account for over 80% of the total AUM of the fund house. The scheme has consistently outperformed the benchmark over three, five and 10 years. 

The senior management team of the fund house invests a significant portion of their available funds into the Parag Parikh Flexi Cap Fund since well ahead of the regulatory requirement for having ‘skin in the game’.

Fund Managers

Four fund managers oversee the Parag Parikh Flexi Cap fund. Rajeev Thakkar and Rukun Tarachandani manage the domestic equities portion of the fund, while Raunka Onkar oversees the foreign component. Raj Mehta manages the fixed-income portion.

Holdings

A large portion of Parag Parikh Flexi Cap Fund’s holdings are spread across banks, computer software, capital markets, power, finance, FMCG, consumable fuels, IT and automobiles. It also holds significant cash in its portfolio, allowing the fund managers the flexibility to pick the right stocks whenever opportunities arise. 

Suitability

Parag Parikh Flexi Cap fund has provided inflation beating returns over the years, and is more suitable for investors that have a long-term investment horizon of five or more years. Those with high-risk appetite and ability to withstand volatility should consider this fund. As part of its stock picking process, it does extensive fundamental research and valuation study. 

Investment Objective

This fund aims to create value and long-term capital growth for investors by investing in equity and equity-related securities. Parag Parikh Flexi Cap’s investment philosophy is to invest in value stocks that are available at a discount to their intrinsic value. 

Taxation

As it is a flexi cap mutual fund, the taxation is as follows:

• For short term (less than a year) capital gains will be taxed at 15%

• For long term (more than 1 year) capital gains will be taxed at 10% without indexation benefit. Gains up to Rs 1 lakh are exempt in case of long term.

• Dividends will always be taxed at investors’ respective tax slabs.

Minimum investment & lock-in period

Minimum investment for lump sum payment is ₹1,000 and for SIP is ₹1,000. Parag Parikh Flexi Cap Fund has no lock in period.