Parag Parikh Flexi Cap Fund: Opinions and Fund Reviews
Table Of Content
Introduction
The Parag Parikh Flexi Cap Fund has grown in popularity in the Flexi Cap category, with Assets Under Management (AUM) rising four times in the last 18 months. It currently ranks fifth among the largest funds in its category, with an AUM of Rs 52007.02 crores. However, this year has seen a shift, with the fund ranking among the ten worst-performing Flexi Cap Funds. This study examines the recent performance of the Parag Parikh Flexi Cap Fund, as well as its long-term track record and investing strategy, with the goal of providing investors with information to make informed decisions regarding their investment in this fund.
The Parag Parikh Flexi Cap Fund, formerly known as the Parag Parikh Long Term Equity Fund, has performed exceptionally well. That is far higher than the benchmark (NIFTY 500 TRI) and the broader index (NIFTY 50 TRI) have reached. As a result, it's been a superb pick for investors, routinely outperforming comparable funds and market benchmarks.
Performance Analysis
Let's take a deeper look at how the fund has recently performed, reviewing its returns over the last year, three years, and five years. The graph shown contains some astounding numbers. The fund returned 38.86% in the previous year, which is more than the 30.59% average for its category and benchmark. Over a three-year period, the fund returned 23.59%, above both its category average of 19.13% and its benchmark of 18.88%. Over a 5-year period, the fund returned 23.91%, topping its category average of 17.86% and even outperforming its benchmark of 17.64%. These figures show that the fund has consistently outperformed its peers and benchmark throughout various time frames, demonstrating strong performance.
Looking back at how the fund has fared in the past, it has done extremely well. The returns over the last three years were 17.86%, which was higher than the benchmark's 14.09%. Going a step further, the fund's performance over the last five years was 17.99%, while the benchmark was 13.21%. This implies that the fund has not only performed well recently, but it has a track record of exceeding its benchmark, showing that it is a safe bet for investors.
Risk Metrics
When discussing investing risk, there are two key numbers to consider. The first is the standard deviation, which for this fund is 11.32. It's a measure of how much the fund's performance fluctuates. A larger number indicates more ups and downs, which makes it riskier.
The Sharpe Ratio, which is 1.45 for this fund, is the second value. This is a favourable sign since it indicates that the fund has provided high returns in relation to the risk it entails. A greater Sharpe Ratio indicates that the fund has done well in terms of providing returns for the amount of risk it takes.
When investors compare these two numbers, they can see how the fund handles ups and downs and whether it's a good match for their own risk tolerance. It's like having a tool that helps you assess if the fund's performance is worth the risk it entails, making it easier for investors to make informed decisions based on their individual goals and risk tolerance.
Portfolio Allocation
According to the pie chart, the majority of the fund's money, approximately 84.80%, is in equities Equity Funds. The remaining 14.2% is in debt funds, which are similar to loans. Finally, a minor portion, 1.04%, is in cash or quickly accessible money. So the fund has a lot of equities, some loans, and a little cash on hand.
Sector-wise Allocation
Investigating the fund's investment concentration on various sectors within its total asset allocation yields the following top 5 sectors with varying weightages:
Financials leads the pack with 30.76%.
Services comes in second with a 14.26% share.
With 11.5%, technology is in a prominent position.
The automobile industry accounts for 7.14% of the fund's allocation.
The other sectors, classified as "Others," account for 14.42% of the total.
This breakdown highlights the fund's diverse approach, highlighting large financial investments with allocations to services, technology, and the automobile industry.
Management Team
Mr. Rajeev Thakkar
Mr. Thakkar has worked with PPFAS AMC since May 2013, having a lot of experience as a chartered accountant, cost accountant, CFA, and CFP.
Raj Mehta
Mr. Mehta began as an intern at PPFAS Mutual Fund in 2012 and has rapidly ascended the ranks to his current position on the fund management team since January 2016. He holds a CFA Charter and is a commerce graduate of the University of Mumbai (N.M. College). He is also a fellow member of the Institute of Chartered Accountants of India (ICAI).
Raunak Onkar
Mr. Onkar, who holds an MMS (Finance) from the University of Mumbai, has worked with PPFAS since May 2013. He began as a research analyst and ascended to the post of Head of Research in 2011. He is now an Associate Fund Manager.
Rukun Tarachandani
Mr. Tarachandani has been a consultant to PPFAS Mutual Fund from May 2022. He has substantial expertise from prior work at Kotak Mutual Fund, Goldman Sachs, and Unnati Investment Management & Research Group, as well as qualifications in B.tech (Information Technology), PGPM (Finance), CFA, and CQF.
Mansi karia
Ms. Karia is a recent addition to PPFAS Mutual Fund, joining in December 2023 and offering her skills and knowledge to the team.
Conclusion
Over the last 18 months, the Assets Under Management (AUM) of the Parag Parikh Flexi Cap Fund has increased significantly, putting it as the fifth-largest fund in its category. While it has been one of the ten worst-performing Flexi Cap Funds this year, a closer look reveals a strong long-term track record.
Over the last one, three, and five years, the fund has consistently beaten its category norms and benchmarks, with exceptional returns of 38.86%, 23.59%, and 23.91%, respectively. Risk measures point to moderate volatility (standard deviation of 11.32) and appealing risk-adjusted returns (Sharpe Ratio of 1.45).
The portfolio is heavily weighted towards equities (84.80%), with a moderate allocation to debt funds (14.2%) and a minor allocation to cash equivalents (1.04%). The sector-diversified allocation includes notable assets in finance, services, technology, and the automobile industry.
Before investing in the Parag Parikh Flexi Cap Fund, potential investors should perform thorough research, aligning their financial goals, risk tolerance, and considering the suitability of a Systematic Investment Plan (SIP).
Best Funds
| Top funds | 1M Return | 6M Return | 1Y Return | 3Y Return | 5Y Return |
|
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|---|---|---|---|---|---|---|---|
| Parag Parikh Arbitrage Fund Regular - Growth | 0.48% | 0% | 0% | 0% | 0% | Invest | |
| Parag Parikh Conservative Hybrid Fund Regular - Growth | 1.41% | 8.55% | 17.92% | 0% | 0% | Invest | |
| Parag Parikh Flexi Cap Fund Regular-Growth | 0.42% | 16.62% | 41% | 22.29% | 22.97% | Invest | |
| Parag Parikh Tax Saver Fund Regular - Growth | 2.06% | 15.18% | 33.55% | 22.27% | 0% | Invest |