Parag Parikh Flexi Cap Fund: Beating Market Cycles Consistently

The stock market is going through a turbulent phase, with two major indices BSE Sensex and NSE Nifty, down more than 10 per cent from their recent peaks. Given the heightened volatility and uncertainty in the market, it is prudent to consider investing in funds with strong historical performance and proven track records. Given the current situation, Parag Parikh Flexi Cap Fund could be a decent choice. The fund has proven its mettle across market cycles.

Being a flexicap fund, it has the freedom to invest across market capitalisation without any restrictions. Fund managers have the flexibility to adjust their portfolio allocation based on market conditions and valuations allowing them to capitalise on favourable opportunities across the market segments.

The fund not only helps take advantage of equity on the domestic front, but also gives exposure to global business disruptors like Microsoft Corporation, Alphabet Inc, Meta Platform Inc, Amazon.com Inc and so on.

Portfolio

The fund invests a minimum 65 per cent in Indian equities across market capitalisation and sectors. This allocation helps it to take advantage of equity taxation. The remaining 35 per cent is allocated to foreign stocks and other financial instruments. Currently, the scheme has invested 12.42 per cent in four foreign listed securities—Meta (3.44 per cent), Alphabet (3.30 per cent), Microsoft (3.06 per cent), and Amazon (2.62 per cent). The scheme prefers to invest in quality businesses, having high pricing power and entry barriers, a high return on capital, and a strong balance sheet. The fund manager prefers a buy-and-hold strategy in conviction stocks instead of churning the portfolio to generate alpha.

Notably, the average price-to-earning (P-E) ratio of the portfolio stands at 22.43, which is the lowest in its category.

Performance

It outperformed its benchmark and peers over 1, 3, and 5 years, with a 10-year return of 19.57 per cent against the category average of 16.63 per cent.

OLM Take

The scheme could be a decent choice for long-term goals through SIP.

kundan@outlookindia.com