Parag Parikh Flexi Cap Fund December factsheet has been released by the fund house. The December factsheet shows that the fund has reduced its cash holdings from almost 13.35% of AUM in November to 10.48% by December end. The total AUM for the Parag Parikh Flexi Cap Fund, as of December 2022, was Rs 28,248.50 Crores.
The exposure to foreign stocks is seen to come down reflecting largely the meltdown in stock prices of foreign shares held in the portfolio. As of October 31, 2022, the total exposure to foreign stocks was 16.49%, which fell to 15.59% in November and by December end it has settled at 15.51%.
However, the weightage to two US stocks – Microsoft, and Meta have increased.
“The increase in weightage is almost entirely a function of the relative performance of Microsoft and Meta in December vs. other portfolio holdings. I wouldn’t read too much into the weight increase. There wasn’t any material increase in the holdings in these stocks,” says Rukun Tarachandani, Fund Manager, PPFAS Mutual Fund.
Alphabet Inc. (Google Class A) 4.67%, Microsoft Corporation, 5.05%, Meta Platforms Inc. (Formerly Facebook Inc.), 2.08%, Amazon, 3.17%, and Suzuki Motor Corp. (0.54%) are among the foreign investments held by the Parag Parikh Flexi Cap Fund as of December.
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Over the last few months, the fund was increasing its cash holdings. The fund had 9.4% cash as of July 31, which had increased to 10.08% by the end of August which further increased to 10.65% in September. As of October 31, the scheme had approximately 11.58% cash and liquid assets. FRD and TREPS including Cash & Cash Equivalent and Net Current Assets are the cash holdings in the scheme.
As of December 2022, 70.25% of the total corpus was invested in Indian equities. The fund has also taken Arbitrage positions in some portfolio stocks. The total exposure after arbitrage is 74.01%.
“Arbitrage positions involve buying stock in cash and shorting the same stock in the same quantity in futures. This is done to capture the spread between the price of the stock in the cash market and in the futures market. When cash-to-futures arbitrage spreads are higher than the TREPS yield, we invest the incremental cash in arbitrage positions to earn a better return on our cash holdings. Arbitrage positions are used to deploy cash over the short term (1-2 months). This has been done earlier as well,” says Tarachandani.
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The top 3 sectors for Parag Parikh Flexi Cap Fund are Finance, Internet & Technology and banks – 15.77% allocation is in the Finance sector, 11.80% is in Internet & Technology and 11.86% is in banks. Within the Indian equity allocation, the top 5 companies with over 5% allocation include Housing Development Finance Corporation 8.37%, Bajaj Holdings & Investment 7.27%, ITC 7.12 %, ICICI Bank 5.92% and Axis Bank 5.94 %. HCL Technologies and Coal India have exposure of 5.46% and 5.05% respectively.
Here is how the fund has performed over the last 1-3-5 years.
Tier 1 Benchmark Index is NIFTY 500 (TRI) and the Additional Benchmark is NIFTY 50 (TRI).
Dec. 31, 2021 to Dec. 30, 2022 (Last 1 year)
Parag Parikh Flexi Cap Fund: -7.25%
NIFTY 500: 4.26%
NIFTY 50: 5.71%
Dec. 31, 2019 to Dec. 30, 2022 (Last 3 years)
Parag Parikh Flexi Cap Fund: 21.33%
NIFTY 500: 17.38%
NIFTY 50: 15.52%
Dec. 29, 2017 to Dec. 30, 2022 (Last 5 years)
Parag Parikh Flexi Cap Fund: 15.25%
NIFTY 500: 11.50%
NIFTY 50: 12.84%
The Parag Parikh Flexi Cap Fund, originally known as the Parag Parikh Long Term Equity Fund, is an open-ended equity fund that invests in companies with large, mid, and small capitalizations. The exposure to overseas equities distinguishes the Parag Parikh Flexi Cap Fund from other plans in the same category.