Top MFs: Parag Parikh Flexi Cap Fund

Objectives

Parag Parikh Flexi Cap Fund is a Multi Cap mutual fund scheme from PPFAS Mutual Fund.

Fund Highlights

This fund has been in existence for over 9 years, having been launched on 13/05/2013.

Parag Parikh Flexi Cap Fund Direct-Growth has ₹19,933 Crores worth of assets under management (AUM) as on 31/12/2021 and is medium-sized fund of its category.

The fund has an expense ratio of 0.82%, which is close to what most other Multi Cap funds charge.

The expense ratio of the fund is 1.93%

For units above 10% of the investment, exit load of 2% if redeemed within 365 days and 1% if redeemed after 365 days but on or before 730 days.

Minimum investment required is Rs 1000 and minimum additional investment is Rs 1000. Minimum SIP investment is Rs 1000.

Returns

Parag Parikh Flexi Cap Fund returns of last 1-year are 36.25%. Since launch, it has delivered 20.89% average annual returns. The fund has doubled the money invested in it every 2 yrs.

Its trailing returns over different time periods are: 46.56% (1yr), 28.6% (3yr), 22.51% (5yr) and 20.72% (since launch). Whereas, Category returns for the same time duration are: 37.8% (1yr), 18.07% (3yr) and 15.9% (5yr).

Sector and stock wise exposure

The fund has the majority of its money invested in Technology, Financial, Services, FMCG, Automobile sectors. It has taken less exposure in Technology, Financial sectors compared to other funds in the category.

The fund's top 5 holdings are in Bajaj Holdings & Investment Ltd., Alphabet Inc Class A, ITC Ltd., Microsoft Corportion (US), Amazon. com Inc. (USA).

Tax Implications

1. Gains are taxed at a rate of 15% (Short-term Capital Gain Tax - STCG) if units are redeemed within 1 year of investment.

2. For units redeemed after 1 year of investment, gains of upto Rs. 1 lakh accruing from those units in a financial year shall be exempted from tax.

3. Gains of more than Rs. 1 lakh will be taxed at a rate of 10% (Long-term Capital Gain Tax - LTCG).

4. For Dividend Distribution Tax, the dividend income from this fund will get added to the income of an investor and taxed according to his/her respective tax slabs.

5. Also, for dividend income in excess of Rs 5,000 in a financial year; the fund house shall deduct a TDS of 10% on such income.

Investment Strategy

Its investment universe is not restricted by any self-imposed limitations in terms of sector, market capitalisation, geography, etc.

However, an average of 65% of its corpus will be invested in listed Indian equities, in order to benefit from the favourable Capital Gains tax treatment accorded to such schemes.

Fund Manager

The domestic portion of the scheme is managed by Mr. Rajeev Thakkar, while Raunak Onkar manages the foreign investment component. Raj Mehta is responsible for the 'fixed income' investment component.

Expert Comment

This scheme is only suitable for 'true' long term investors with a minimum period of five years. It follows a simple (though not simplistic) investment process. Parag Parikh Flexi Cap Fund Direct-Growth scheme's ability to deliver returns consistently is in-line with most funds of its category. Its ability to control losses in a falling market is high.