Parag Parikh Flexi Cap Fund is another of my preferred mutual funds under the Flexicap category. This fund has been a part of my portfolio since 2020. I wanted to breakdown this Flexicap fund not just for the readers but also for myself.
Fund Overview
| Category | Details |
|---|---|
| Fund Type | Open-ended dynamic equity scheme. |
| Investment Objective | To generate long-term capital growth by investing in equity and equity-related securities, including Indian and foreign equities, debt securities, and related instruments. |
| Suitability | Suitable for investors with a minimum investment horizon of 5 years. |
| Risk Level | Medium to High. |
| Benchmark | Tier 1 Benchmark: Nifty 500 TRI. Additional Benchmark: Nifty 50 TRI. |
Key Features
| Feature | Details |
|---|---|
| Asset Allocation | – Equity and Equity-related Instruments: 65% to 100% (Medium to High Risk). – Debt Securities and Money Market Instruments: 0% to 35% (Low to Medium Risk). – Foreign Equity and Equity-related Instruments: 0% to 35% (Medium to High Risk). – REITs & InvITs: 0% to 10% (Medium to High Risk). |
| Investment Strategy | – Focuses on value investing, buying securities at a discount to their intrinsic value. – Emphasizes long-term growth (5+ years) and low portfolio churn. – Uses derivatives for hedging, portfolio balancing, and trading (up to 50% of NAV). |
| Plans and Options | – Direct Plan: For investors who invest directly (no distributor commission). – Regular Plan: For investors who invest through a distributor. – Growth Option: Income is reinvested; no IDCW (Income Distribution cum Capital Withdrawal) is declared under normal circumstances. |
Performance
| Time Period | Direct Plan | Regular Plan | Benchmark (Nifty 500 TRI) |
|---|---|---|---|
| Since Inception (May 2013) | 21.17% | 20.31% | 16.89% |
| Last 1 Year (Sep 2023-Sep 2024) | 40.75% | 39.74% | 41.27% |
| Last 3 Years (Sep 2021-Sep 2024) | 19.15% | 18.14% | 18.42% |
| Last 5 Years (Sep 2019-Sep 2024) | 27.44% | 26.30% | 22.25% |
| Last 10 Years (Sep 2014-Sep 2024) | 19.59% | 18.71% | 15.47% |
Fund Managers
| Fund Manager | Role |
|---|---|
| Mr. Rajeev Thakkar | Chief Investment Officer, managing the fund since its inception in May 2013. |
| Mr. Raunak Onkar | Dedicated fund manager for overseas investments. |
| Mr. Raj Mehta | Fund manager for the debt component since January 2016. |
| Mr. Rukun Tarachandani | Managing the equity segment since May 2022. |
| Ms. Mansi Kariya | Co-fund manager for the debt component since December 2023. |
Investment Details
| Category | Details |
|---|---|
| Minimum Investment | – Initial Purchase: ₹1,000 and in multiples of ₹1 thereafter. – Additional Purchase: ₹1,000 and in multiples of ₹1 thereafter. – SIP (Systematic Investment Plan): – Monthly SIP: ₹1,000 and multiples of ₹1. – Quarterly SIP: ₹3,000 and multiples of ₹1. – STP (Systematic Transfer Plan): – Daily, Weekly, Monthly STP: ₹1,000 and multiples of ₹1. – Quarterly STP: ₹3,000 and multiples of ₹1. |
| Exit Load | – 10% of units can be redeemed without any exit load from the date of allotment. – For redemptions beyond 10%: – 2% if redeemed within 365 days. – 1% if redeemed after 365 days but within 730 days. – No exit load if redeemed after 730 days. |
| Expense Ratio | – Total Expense Ratio (TER): Up to 2.25% per annum. – Direct Plan: Lower expense ratio (excludes distributor commissions). |
Taxation
| Tax Type | Details |
|---|---|
| Short-term Capital Gains (STCG) | If units are sold within 1 year, gains are taxed at 15%. |
| Long-term Capital Gains (LTCG) | If units are held for more than 1 year, gains up to ₹1 lakh are tax-free, and gains above ₹1 lakh are taxed at 10%. |
Risk Factors
| Risk Type | Details |
|---|---|
| Market Risk | The fund’s performance is linked to equity markets, which can be volatile. |
| Currency Risk | Exposure to foreign equities introduces currency risk. |
| Liquidity Risk | Some investments in small-cap or foreign equities may have lower liquidity. |
How to Invest
| Investment Mode | Details |
|---|---|
| Direct Plan | Investors can invest directly through the AMC website or MFCentral. |
| Regular Plan | Investors can invest through a registered distributor or financial advisor. |
| SIP/STP | Investors can start a Systematic Investment Plan (SIP) or Systematic Transfer Plan (STP) with a minimum commitment of ₹1,000 per month. |
Investor Services
| Service | Details |
|---|---|
| MFCentral | A digital platform for mutual fund transactions. |
| Account Statements | Sent via email or physical mode based on investor preference. |
| Redemption Process | Redemption proceeds are typically dispatched within 3 working days under normal circumstances and within 5 working days in exceptional situations. |
Conclusion
The Parag Parikh Flexi Cap Fund is a well-managed, diversified equity fund that offers exposure to both Indian and global markets. Its focus on value investing, low portfolio churn, and strong historical performance make it an attractive option for long-term investors. However, investors should be aware of the risks associated with equity investments and ensure that the fund aligns with their financial goals and risk tolerance.
