Parag Parikh Flexi Cap Fund: A Deep Dive into Strategy, Performance & Asset Allocation
The Story Behind PPFAS
Parag Parikh Mutual Fund was launched in 2013 under the sponsorship of Parag Parikh Financial Advisory Services (PPFAS), founded by the late Parag Parikh in 1992. Currently led by Neil Parag Parikh (Chairman & CEO) and Rajeev Thakkar (CIO & Equity Fund Manager), PPFAS follows a disciplined value investing approach. The firm offers six mutual fund schemes, including equity, debt, and hybrid funds.
Investment Philosophy & Key Principles
PPFAS adheres to the Hammurabi Code—a principle of accountability, ensuring that investment decisions are taken with utmost responsibility and diligence, and they invest in their own fund to showcase the same.
The Evolution of Parag Parikh Flexi Cap Fund
Initially launched as Parag Parikh Long-Term Value Fund, the scheme underwent name changes due to regulatory updates, ultimately becoming Parag Parikh Flexi Cap Fund (PPFCP). It remains one of the largest funds in India. The fund aims to generate long-term capital growth by investing in a diversified portfolio of equity & equity related securities across market capitalizations and geographies. It follows a buy-and-hold strategy (min 5 years holding period is recommended by the fund) and is benchmarked against the Nifty 500 TRI.
Key Portfolio Characteristics
Asset Allocation Trends
The fund's average equity exposure (domestic & foreign) stands at 83%. Over time, equity allocation declined from 91% in Q3FY17 to 72% in Q2FY19, then surged to 97% in Q4FY20 during the COVID crash, capitalizing on bargain opportunities. Notably, equity allocation has remained below average in the first three quarters of 2025, indicating the fund’s anticipation of valuation corrections—aligning with its strategy of investing in undervalued stocks.
The fund's average domestic equity exposure stands at 65%, while foreign equity averages 25%. Notably, foreign equity exposure saw a sharp decline from Q1FY23, possibly indicating that the domestic market presented more attractive opportunities.
While the fund isn’t entirely sector-agnostic, it has maintained a significant allocation to technology and IT-related stocks over the past decade, followed closely by banks, finance, and auto & auto ancillary sectors. Since 2021, finance has overtaken auto & auto ancillaries, likely due to better opportunities and strong demand in the sector post the COVID crash.
In recent years, the fund has also increased its exposure to energy and utilities, rising from 5% in 2022 to 12% in 2024. Meanwhile, its allocation to technology and IT stocks has gradually declined from 38% in 2021 to 19% in 2024. Notably, the fund has held investments in Axis Bank and ICRA since its inception, highlighting its commitment to a long-term value investing strategy rather than frequent portfolio churn, a contrast to many other mutual funds.
Performance Analysis: PPFCP vs. Nifty 50
The performance comparison between Parag Parikh Flexi Cap Fund (PPFCF) and Nifty 50 highlights the fund’s ability to generate superior risk-adjusted returns with lower volatility. PPFCF’s standard deviation of 12.4% is notably lower than Nifty 50’s 16.5%, indicating a more stable performance. Additionally, with a beta of 0.59, the fund exhibits lower sensitivity to market fluctuations, while its Sharpe Ratio of 0.86 suggests it has delivered significantly better returns per unit of risk compared to Nifty 50’s 0.18.
Interestingly, PPFCF’s performance closely tracked that of the Nifty 50 until the COVID crash in early 2020. However, post-COVID, the fund leveraged market corrections to its advantage, leading to exponential growth. This is evident in its 5-year CAGR of 28.0%, significantly outpacing Nifty 50’s 17.6% over the same period. Even in the shorter term, PPFCF’s 1-year and 3-year CAGR of 12.8% and 17.7%, respectively, remain far ahead of the Nifty 50’s 1.8% and 10.0%.
The drawdown analysis further underscores Parag Parikh Flexi Cap Fund’s (PPFCF) resilience during market downturns compared to the Nifty 50. Over the years, the fund has consistently experienced lower drawdowns, highlighting its ability to protect investor capital during corrections.
From 2017 to 2025, PPFCF has outperformed the index in almost every major drawdown phase. Notably, during the COVID-19 crash in 2020, PPFCF declined by 31%, while Nifty 50 dropped 38%, showcasing the fund’s defensive approach and superior risk management. However, in 2023, 2024, and 2025, PPFCF’s drawdowns of -9%, -5%, and -8%, respectively, were significantly lower than Nifty 50’s -10%, -11%, and -16%, reinforcing its downside protection capabilities.
These figures indicate that PPFCF’s investment strategy—focusing on fundamentally strong businesses, a mix of domestic and foreign equities, and strategic cash allocation—has helped it navigate turbulent markets better than the broader index. By limiting downside risk while capitalizing on market recoveries, the fund has established itself as a strong performer for long-term investors seeking growth with stability.
Minds Behind Parag Parikh Flexi Cap Fund: The Fund Management Team
Rajeev Thakkar – Chief Investment Officer & Equity Fund Manager
With nearly three decades of experience, Rajeev Thakkar specializes in investment banking, fixed-income portfolios, and equity research. He joined PPFAS in 2001 and played a key role in shaping its investment strategy. He holds a B Com (Bombay University), is a Chartered Accountant, CFA Charter Holder, and a Graduate ICWA.
Raunak Onkar – Fund Manager (Overseas Investments) & Co-Fund Manager
Raunak Onkar has been with PPFAS since 2008, managing global equities and leading research efforts. His expertise lies in identifying value opportunities in international markets. He holds a B Sc in IT and an MMS in Finance from Mumbai University.
Raj Mehta – Fund Manager (Debt Portfolio)
Raj Mehta, CFA started as an intern at PPFAS in 2012 and now oversees the fund’s debt investments. He is a frequent contributor to financial media and specializes in fixed-income securities. He holds a B Com, M Com (Mumbai University), is a Chartered Accountant, and a CFA Charter Holder.
Rukun Tarachandani – Domestic Equity Fund Manager
With over a decade of experience in equity research, Rukun Tarachandani, CFA, CQF has worked with Goldman Sachs and Kotak Mahindra Asset Management. His expertise includes small/midcaps, behavioral finance, and quantitative investing. He holds an MBA (MDI Gurgaon), an MS in Data Science (Northwestern University), a B Tech (Nirma University), and is a CFA Charter Holder.
Mansi Kariya – Co-Fund Manager (Debt) & Credit Research Analyst
Mansi Kariya, CFA joined PPFAS in 2018 and specializes in credit research and debt portfolio management. She has prior experience in debt products and financial analysis. She holds a B Com (Hons) from Calcutta University, an MS in Finance (ICFAI University), and is a CFA Charter Holder.
Steady Hands in a Volatile Market
Parag Parikh Flexi Cap Fund has consistently demonstrated a disciplined, value-driven investment approach that sets it apart in the Indian mutual fund space. Its strategic asset allocation, prudent risk management, and focus on long-term wealth creation have enabled it to navigate volatile market cycles effectively. Backed by an experienced fund management team, PPFCF remains a compelling choice for investors seeking sustainable, long-term growth with a strong emphasis on value investing.
Disclosure: This analysis is for educational purposes only and should not be considered investment advice or a recommendation. I am personally invested in this fund, I encourage readers to conduct their own research or consult a registered financial advisor before making any investment decisions.
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