One of the most commonly invested mutual fund schemes in India is the Parag Parikh Flexi Cap Fund. It is a liquid, open-end equity scheme operated by PPFAS Asset Management Private Limited.G It is important to note that in this article we shall discuss five main reasons why an investor ought to consider buying the parag parikh flexi cap fund.
- Consistent long term performance
The Parag Parikh Flexi Cap Fund has been showing great performance since it was launched in 2013. In the last 10 years the fund managed to generate annualized ROI of more than 17% and outperform the nifty 500 TRI index on average 4% annually. There is no single investor who invested in it for over seven years and ended up making losses. In market up cycles or even in periods of significant market downturns, the fund has been able to safeguard investor capital effectively by means of careful stock picking and sound risk management.
- Low cost
An expensive ratio of 0.62% is very low when compared with more than 2% of the average active management flexicap funds. Such strategy provides low cost base, allowing more of returns for investors. Low-cost funds have, through long periods, proved to be better than high-cost funds. Fund House, therefore places investor’s interests above profit margins by ensuring that costs are kept at minimum levels.
- Proven portfolio management approach
It is directed by a pool of competent fund managers headed by Mr. Rajeev Thakkar and Mr. Raunak Onkar. This is achieved via bottom-up stock picking research driven strategy. This is an open ended fund that can be invested in various markets within India and beyond, across different sectors and at any market cap. With this strategy, the fund was able to record above average returns and lesser market fluctuations as compared to general markets. They have proven fund manages who have worked for more than 10 years.
- Suitable for long term wealth creation
Investors with a medium-term view (5 to 7 years) can consider equity mutual funds. The Parag Parikh Flexi Cap fund has managed to deliver inflation beating returns over the long terms since their launch in 2013. The growth of wealth is quite significant over a period and hence anyone looking to invest towards major longer term goals such as children’s education or retirement can make use of this fund. This volatility in short term returns makes it unsuitable for short term investments.
- Tax efficient
For investments, equity mutual funds are tax exempted under section 80C (up to INR). 1. 5 lakhs per year. Moreover, equity fund capital gains taxes are relatively low as compared to those for direct stocks. Long term capital gains above Rs. The Parag Parikh Flexi Cap Fund is a 10-year income tax exemption under Section 80 CCD on savings of Rs. 1 lakh a year (without indexation benefits). Hence, it offers a viable and tax-efficient tool for creating long-term wealth through equity investments.
Investors who seek to build wealth by investing in a well-diversified equity portfolio should consider the parag parikh mutual fund. One of the best flexi cap funds is its proven history that consistently delivers above market returns with less risk. The fund would be suitable for investors who intend to set five to seven years as their minimum investment horizon towards the purpose of creating long-term wealth through tax saving strategies by means of lump sum investments and/or SIPs.