The Mutual Fund Show: How Parag Parikh Flexi Cap Stands Out Among Peers

PPFAS Mutual Fund's investment in international stocks wasn't primarily aimed at achieving higher returns, but rather at diversifying the portfolio and mitigating risk, according to Chairman and Chief Executive Officer Neil Parag Parikh.

The Parag Parikh Flexi Cap Fund is highly favoured among Indian investors, with nearly every advisor and fund manager on NDTV Profit's The Mutual Fund Show recommending it.

The fund's industry allocation reveals significant holdings in various sectors: banks (20.07%), cash and cash equivalents (11.16%), computer software (11.02%), capital markets (7.78%), power (6.42%), finance (6.3%), IT software (5.68%), automobiles (5.54%), diversified FMCG (5.01%), consumable fuels (4.93%), pharma and biotech (3.83%), and debt and money market instruments (3.64%).

According to Parikh, the fund prefers to remain "fully invested".

Addressing the dilution of international stocks, Parikh mentioned, "Overseas securities are no longer able to remit new funds due to the $7 billion cap. International exposure has decreased." However, he noted that the mutual fund still holds approximately 14.13% of securities issued by foreign companies.

Regarding concerns about fund size, Parikh reassured investors, stating, "There is nothing to worry about on fund size. Only one thing changes with a bigger size, that is that some of the flexibility of investing in smaller cap stocks and taking reasonable exposure to those." He added, "We would have about 25 to 30 stocks in the portfolio, but because of the size of the fund, we will have a longer tail and have to take more smaller stocks with a small percentage. Only on the small-cap stocks, there would be a little less flexibility."

As for future plans, the mutual fund currently has no intentions of launching any small-cap funds. It prefers to maintain a diversified strategy, as per Parikh's statement.