Parag Parikh Flexi Cap Fund Direct Growth

Parag Parikh Flexi Cap Fund, launched in 2013, is a flexi-cap mutual fund that strategically invests across large-cap, small-cap and mid-cap companies. The term flexi means that the fund manager has the ‘flexibility’ to re-allocate assets across market capitalization as per their assessment. 

The fund is required by SEBI to invest at least 65% of its assets in equity and equity-related instruments. The remaining is invested in debt, money market securities and foreign securities. Unlike most flexi-cap funds, this scheme also actively invests in overseas equities, making it one of the rare Indian mutual funds with a global diversification edge.

The fund is benchmarked against NIFTY 500 - TRI. Which helps the fund make a fair comparison of its performance vs that of stocks in a broader market across market capitalization. Sector-wise, the fund manager actively allocates capital across various industries, with the Financial and Energy sectors being the most significant.

Investment Strategy

Parag Parikh Flexi Cap Fund follows a deep value investing approach, focused on business ownership rather than stock trading. They follow an approach where they invest in businesses with a strong competitive advantage and avoid overpaying for companies. It seeks:

-Cash-generating, low-debt companies

-Businesses with a strong moat and competitive advantage

-Shareholder-friendly management teams

Should You Invest In Parag Parikh Flexi Cap Fund?

If you are someone who prefers well-researched, thought-based investing, Parag Parikh Flexi Cap Fund may be a good option for you. This fund is ideal for investors who believe in long-term wealth creation and are willing to stay patient during phases of underperformance. It’s especially suited for those who appreciate global diversification without sacrificing the tax benefits of an Indian equity fund. 

Taxation On Parag Parikh Flexi Cap Direct Growth Fund

Despite International exposure, Parag Parikh Flexi Cap Fund enjoys the same tax as that of an equity mutual fund. Your gains from mutual funds are taxed based on the holding period. 

If you sell your investments within 12 months, they are classified as short-term capital gains (STCG). If you sell your investments after 12 months, they are considered long-term capital gains (LTCG). 

Tax on short-term capital gains is levied at 20%. In the case of long-term capital gains, an exemption of ₹1,25,000 is received after which a tax of 12.5% is levied.

Allocation & Historical Return

Currently, the fund's portfolio comprises 2.8% small-cap stocks, 62.70% large-cap stocks, and 1.80% mid-cap stocks.

With an AUM of ₹103868.0 crores, Parag Parikh Flexi Cap Fund Direct Growth generated a return of 10.5% in 1 year, 25.2% in 3 years, 26.4% in 5 years. while its benchmark index (Nifty 500) generated 2.8% in 1 year, 20.5% in 3 years, and 22.1% in 5 years.