About Parag Parikh Flexi Cap Fund Direct Growth
- Fund Name: Parag Parikh Flexi Cap Fund Direct Growth
- Fund Type: EquityFlexi Cap
- Fund Manager Background: The fund is managed by a team led by Rajeev Thakkar, alongside Raunak Onkar, Raj Mehta, and Rukun Tarachandani. Rajeev Thakkar, the main fund manager, boasts an impressive 18 years of experience in the financial market, ensuring a deep understanding and a strategic approach to managing the fund’s portfolio.
Holding Analysis or Portfolio Breakdown
The top 15 stock holdings of Parag Parikh Flexi Cap Fund Direct Growth and their respective percentages are as follows:
- Clearing Corporation Of India Ltd. – 8.83%
- HDFC Bank Ltd. – 7.93%
- Bajaj Holdings & Investment Ltd. – 7.23%
- Power Grid Corporation Of India Ltd. – 6.13%
- Maruti Suzuki India Ltd. – 5.29%
- HCL Technologies Ltd. – 5.28%
- Coal India Ltd. – 5.14%
- ICICI Bank Ltd. – 5.13%
- ITC Ltd. – 4.99%
- Axis Bank Ltd. – 4.32%
These top holdings underscore the fund’s diversified approach, emphasizing stable, well-performing companies across various sectors.
Returns and Rankings in Their Category
Since its inception on 28 May 2013, the fund has generated an average annual return of 38.71%. It holds a remarkable position within its category, boasting a return of 38.77% over the past year, placing it well above the category average. This performance has earned it top rankings, specifically 6th in the 3-year category and 2nd in both the 5-year and 10-year categories among its peers.
Fund Age
The fund has been operational for nearly a decade, having been established on 28 May 2013. This period has allowed it to navigate through various market cycles, demonstrating its resilience and strategic investment choices.
Conclusion: Parag Parikh Flexi Cap Fund Direct Growth stands out in the mutual fund landscape, thanks to its strategic asset allocation, experienced management team, and impressive track record of returns. Its focus on a diversified portfolio across sectors and market capitalizations makes it a potentially valuable addition to the portfolio of investors looking for long-term capital growth. The fund’s ability to outperform its peers and maintain a lower expense ratio further enhances its appeal, making it a compelling choice for those willing to tolerate very high risk for the potential of very high rewards.
TLDR: Parag Parikh Flexi Cap Fund Direct Growth
For High Risk, Medium Risk, and Low Risk Investors:
- High-Risk Investors: Ideal, given its very high-risk profile and potential for high returns.
- Medium-Risk Investors: May consider, if they’re willing to diversify and accept the associated risk for higher returns.
- Low-Risk Investors: Not recommended due to the fund’s very high-risk profile.
Time Horizon Suitability:
- Long-Term (More than 5 years): Highly suitable, given its historical performance and growth strategy.
- Medium-Term (1-5 years): Suitable, with a caution towards its volatility.
- Short-Term (1 year or less): Not recommended due to potential volatility and short-term risk.
Analysis Based on Given Data:
- Current NAV: ₹73.45 as of 19 Mar 2024.
- Turnover Ratio: 29.7%, indicating a moderate level of trading activity. Suitable for long-term investing, as it suggests a balanced approach to portfolio adjustments.
- Returns:
- Last 1 Year: 38.77%
- Last 3 Years: 21.48% (Annualized)
- Last 5 Years: 22.50% (Annualized)
- Expense Ratio: 0.57%, lower than many peers, contributing to its efficiency and better net returns for investors.
- Advanced Ratios: Showcases strong risk-adjusted returns (Sharpe Ratio of 3.59), indicating efficient performance relative to the risk taken. The fund’s Alpha of 16.86 suggests it has outperformed its benchmark significantly after adjusting for risk.
- Peer Comparison: Stands out in its category with a top-ranking performance in both 5-year and 10-year returns, showcasing its superior management and strategy.
Conclusion: Parag Parikh Flexi Cap Fund Direct Growth is a top-performer with a very high-risk profile, making it an excellent choice for long-term, high-risk investors seeking substantial growth. Its low expense ratio and efficient management enhance its appeal, though its risk profile may not suit every investor. With a diversified portfolio and strategic asset allocation, it’s positioned well for sustained growth, especially for those with a longer investment horizon.
Analysis of Parag Parikh Flexi Cap Fund Direct Growth
Current NAV
- Current NAV: ₹73.45 as of 19 Mar 2024.
- Explanation: NAV (Net Asset Value) reflects the fund’s per share market value. This figure represents the value at which investors can buy or sell fund units on a given day.
Turnover Ratio
- Turnover Ratio: 29.7%.
- Healthy for Long-Term and Short-Term Investing?: A moderate turnover ratio like 29.7% suggests a balanced approach, indicating both stability for long-term investors and sufficient activity to capture short-term opportunities.
Returns in Last 1, 3, 5 Years
- Last 1 Year: 38.77%.
- Last 3 Years (Annualized): 21.48%.
- Last 5 Years (Annualized): 22.50%.
- Explanation: The returns signify robust performance across short to medium terms, showcasing the fund’s ability to deliver significant growth.
Key Metrics
Expense Ratio
- Expense Ratio: 0.57%.
- Explanation: This is relatively low, enhancing the potential net returns for investors by reducing the cost of fund management.
PE Ratio
- PE Ratio: Not provided in the data.
- Explanation: PE Ratio indicates the market price of a stock divided by its earnings per share, which helps investors evaluate if the stock is overvalued or undervalued.
Sharpe Ratio
- Sharpe Ratio: Not provided in the data.
- Explanation: This ratio measures the performance of an investment compared to a risk-free asset, after adjusting for its risk, indicating the risk-adjusted return.
Cat Exp Ratio (Category Expense Ratio)
- Cat Exp Ratio: 1.11% for the category.
- Explanation: The fund’s expense ratio is below the category average, indicating it is cheaper than many of its peers.
Cat PE Ratio (Category PE Ratio)
- Cat PE Ratio: Not provided in the data.
- Explanation: Represents the average PE Ratio of the fund’s category, useful for comparing the fund’s valuation to its peers.
Cat Sharpe Ratio (Category Sharpe Ratio)
- Cat Sharpe Ratio: Not provided in the data.
- Explanation: Illustrates the average Sharpe Ratio within the fund’s category, a measure for comparing risk-adjusted returns across different funds.
Peer Comparison
- Comparison: The fund stands out with a higher 1-year return of 38.77% compared to its peers and demonstrates robust growth over 3 and 5 years. Its lower expense ratio (0.57% compared to the category average of 1.11%) suggests it is a cost-efficient investment. However, detailed comparisons with specific peer funds are not provided in the data.
Conclusion: The Parag Parikh Flexi Cap Fund Direct Growth exhibits a compelling mix of high returns and a lower-than-average expense ratio, making it an attractive option for investors seeking growth in the flexi cap category. Its moderate turnover ratio is suitable for both long-term stability and short-term opportunity capture. Lack of specific ratios like PE Ratio and Sharpe Ratio in the provided data limits a comprehensive risk-return analysis. Nonetheless, its performance metrics suggest a well-managed fund capable of navigating market fluctuations effectively.
Parag Parikh Flexi Cap Fund Direct Growth Analysis
Top Holdings Company
The top holdings in the Parag Parikh Flexi Cap Fund Direct Growth as of the latest data include:
- Clearing Corporation Of India Ltd.: 8.83%
- HDFC Bank Ltd.: 7.93%
- Bajaj Holdings & Investment Ltd.: 7.23%
- Power Grid Corporation Of India Ltd.: 6.13%
- Maruti Suzuki India Ltd.: 5.29%
- HCL Technologies Ltd.: 5.28%
- Coal India Ltd.: 5.14%
- ICICI Bank Ltd.: 5.13%
- ITC Ltd.: 4.99%
- Axis Bank Ltd.: 4.32%
These holdings reflect a diversified portfolio across various sectors, potentially mitigating risk while aiming for growth.
Advanced Ratios
- Standard Deviation: 8.70, indicating moderate volatility in fund returns.
- Beta: 0.67, suggesting lower volatility compared to the market.
- Sharpe Ratio: 3.62, showing a high excess return for the extra volatility risk taken by investors.
- Sortino Ratio: 6.31, further emphasizing good risk-adjusted returns.
- Alpha: 16.86, indicating the fund’s ability to outperform its benchmark.
These ratios suggest that the fund is managed efficiently, providing good returns relative to the risk taken.
Peer Comparison
- AUM: ₹58,900.51 Cr., making it one of the larger funds in its category.
- Expense Ratio: 1.31%, which is on the higher side compared to its direct growth variant but still competitive within the category.
- Returns (1Y, 3Y, 5Y): The fund has outperformed many peers with returns of 38.77% (1Y), 21.48% (3Y), and 22.50% (5Y).
- Rank Within Category: The fund consistently ranks high within its category, especially in long-term returns, highlighting its strong performance.
The Parag Parikh Flexi Cap Fund Direct Growth stands out for its robust performance, substantial AUM, and efficient fund management compared to peers.
Fund House and Investment Objective
- AMC: PPFAS Asset Management Pvt. Ltd., known for its value investing approach and long-term investment strategies.
- Investment Objective: The fund seeks to generate long-term capital growth from an actively managed portfolio of equity and equity-related securities across market capitalizations.
The fund’s philosophy focuses on long-term wealth creation, with a preference for high-quality stocks that are expected to benefit from India’s growth story.
Conclusion: The Parag Parikh Flexi Cap Fund Direct Growth is characterized by its well-diversified portfolio, strong performance metrics, and an experienced management team. The higher expense ratio for the regular plan may be a drawback for some investors, but the fund’s consistent outperformance and efficient risk management underscore its appeal for those seeking long-term capital growth in the flexi cap category. The fund’s approach aligns with investors looking for exposure across market caps with a focus on value investing.
Is it Following any Indices or Benchmark?
The Parag Parikh Flexi Cap Fund Direct Growth benchmarks itself against the NIFTY 500 – TRI. This index comprises the top 500 companies listed on the NSE, making it a comprehensive indicator of the Indian equity market. By benchmarking against the NIFTY 500 – TRI, the fund aims to offer a diversified investment approach, reflecting the broader market trends and performances.
Risk Profile of This Mutual Fund
The Parag Parikh Flexi Cap Fund Direct Growth is categorized under the “Very High Risk” profile. This classification indicates that the fund’s investments are subject to significant market volatility and potential for substantial fluctuations in returns. It’s suitable for investors who have a high risk tolerance and a long-term investment horizon.
Market Cap Weightage
As a Flexi Cap fund, the Parag Parikh Flexi Cap Fund Direct Growth has the flexibility to invest across large-cap, mid-cap, and small-cap companies. While specific percentages of investment across these categories are not detailed in the provided data, the fund’s diversified holdings likely include a mix of these to optimize returns and manage risk. The flexi cap strategy allows the fund to adjust its portfolio in response to changing market conditions and opportunities.
For Whom This Mutual Fund is Suitable – The Investor Profile
The Parag Parikh Flexi Cap Fund Direct Growth is most suitable for investors who:
- Have a very high tolerance for risk, understanding that their investment may experience significant volatility.
- Are looking for long-term capital growth and are willing to stay invested for an extended period, typically 5 years or more, to ride out market fluctuations.
- Wish to diversify their portfolio across different market caps, leveraging the fund’s flexibility to potentially maximize returns.
- Are interested in a fund that benchmarks against the broader market (NIFTY 500 – TRI), aiming for comprehensive exposure to the Indian equity market.
Given the fund’s high-risk profile and potential for volatile returns, it’s recommended for seasoned investors who have a clear understanding of their investment goals and risk tolerance.
Risk Profile Analysis
The Parag Parikh Flexi Cap Fund Direct Growth is classified as a very high-risk investment. This classification indicates the fund’s potential for high volatility and significant fluctuations in value. It’s suited for investors who have a long-term investment horizon and a high tolerance for risk. Such investors are typically looking for substantial capital growth and are prepared to endure periods of market volatility to achieve potentially higher returns.
Scheme Information
- Type: Equity Flexi Cap
- Risk Level: Very High Risk
- NAV: ₹73.45 as of 19 Mar 2024
- Expense Ratio: 0.57%
- AUM: ₹58,900.52 Cr as of 20 Mar 2024
- Inception Date: 28 May 2013
- Benchmark: NIFTY 500 – TRI
- Exit Load: For units above 10% of the investment, 2% if redeemed within 365 days and 1% if redeemed after 365 days but on or before 730 days.
- Investment Objective: To generate long-term capital growth from an actively managed portfolio primarily of equity and Equity Related Securities.
AMC Profile and AUM in Details
PPFAS Asset Management Pvt. Ltd. is the asset management company (AMC) behind the Parag Parikh Flexi Cap Fund Direct Growth. Established in 2012, PPFAS AMC has carved a niche in the Indian mutual fund industry with its focus on research-driven and long-term investment strategies.
- Total AUM of the AMC: ₹66,287.50 Cr, which includes a diverse range of schemes beyond just the Parag Parikh Flexi Cap Fund, indicating a broad trust from investors across various fund categories.
- Number of Schemes Offered: 6, suggesting a focused approach towards fund management rather than spreading resources thinly across too many offerings.
- Philosophy: The AMC emphasizes long-term capital growth through an actively managed portfolio of equity and equity-related securities. It is known for its prudent investment practices and has garnered respect for its transparent and investor-first approach.
Key Takeaways for Investors:
Pros:
- Low Expense Ratio: Enhances net returns to investors.
- Substantial AUM: Reflects investor confidence and provides economies of scale.
- Solid track record: Proven ability to generate impressive long-term returns.
Cons:
- Very High Risk: Not suitable for all investors, particularly those with a low tolerance for volatility or a short investment horizon.
- Exit Load: May deter short-term withdrawals but also emphasizes the fund’s focus on long-term holding.
Investor Suitability:
This fund is best suited for investors who are seeking long-term capital growth and are comfortable with the inherent volatility of equity investments. It’s ideal for those who wish to diversify across various market capitalizations through a single fund and have a long investment horizon to ride out market fluctuations.