How Will PPFAS Flexicap Handle Such Large AUM? Neil Parikh Answers
The best stock idea can have good allocation in one scheme instead of allocating the same idea in multiple schemes.
Look at fund-level assets under management and not scheme-level AUM as individual stock limits are at fund level, not scheme. That's what Neil Parikh, chief executive officer at PPFAS Mutual Fund, had to say to an X user wondering how the fund will handle such a large AUM and if they can continue delivering the same kind of returns.
PPFAS Mutual Fund's flexi cap scheme crossed Rs 1 lakh crore AUM in May this year. The scheme has returned 19.04% since its inception on May 24, 2013, according to PPFAS. It has been actively managed by fund managers Rajeev Thakkar, Raunak Onkar and Raj Mehta.
The best stock idea can have good allocation in one scheme instead of allocating the same idea in multiple schemes — basically dilute your best idea with multiple equity schemes, Parikh explained. "Our overall equity AUM is still less than 5% market share of total MF equity AUM," Parikh said, adding that as such, it is not a concern.
What will change is that there will be a longer tail of small-cap stocks, so the number of stocks may increase over time. Can they continue delivering the same kind of returns with all this new money? "Only time will tell," quipped Parikh.
Addressing another query, Parikh also said that despite the SEBI allowing mutual funds to launch a second scheme of the same category, PPFAS will continue with one fund as it does want to add to complexities.
On how US exposure has helped the fund, Parikh said it has helped lower portfolio volatility and provide downside protection. Overseas portfolio returns are similar or slightly lower than the Indian portfolio since inception, he added.
