COVID-19 and Global Investing: Parag Parikh Long Term Equity Fund – Decoded

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Updated: April 9, 2020 1:03:49 PM

Parag Parikh Long Term Equity Fund is an open-ended multi-cap equity scheme investing across large-cap, mid-cap, small-cap stocks.

 international mutual fund, Parag Parikh Long Term Equity Fund, Multi Cap Fund, equity, open ended equity scheme, large cap, mid cap, small cap Stocks, Alphabet Inc (Google Class C), AMAZON.COM INC, Suzuki Motor Corp (ADR), Facebook INC and Nestle SA ADR.PPFAS LTE: While 65.9 per cent is invested in Indian equities, nearly 31.18 per cent is invested in international stocks.

Mutual Funds: Parag Parikh Long Term Equity Fund (PPFAS LTE), an equity mutual fund scheme with international exposure in the equities, was launched almost 5 years ago on May 24, 2013.  At a time when the global stock markets are falling almost in tandem, the fortunes of an equity mutual fund will depend on several global factors if not just local or national levels. Clearly, COVID-19 has impacted economies worldwide and making a prediction of the outcome may just be futile. What an investor may still do is to ensure that the portfolio is diversified geographically too.

Parag Parikh Long Term Equity Fund, an open-ended multi-cap equity scheme investing across large-cap, mid-cap, small-cap stocks is one such scheme that gives the investor to reap benefits of international investing. While 65.9 per cent is invested in Indian equities, nearly 31.18 per cent is invested in international stocks. The fund is benchmarked to Nifty 500 (TRI).

The expense ratio of the PPFAS Long Term Equity Fund for the Regular Plan is 1.98 per cent and for the Direct Plan, it is 1.12 per cent.

Portfolio

The top 3 sectors of PPFAS Long Term Equity Fund are – Banks, Internet & Technology and Finance comprising about 44.81 per cent of the portfolio.

Within the portfolio, the top 3 stocks are- HDFC Bank, Bajaj Holdings & Investment and Mphasis.

The international stocks in the PPFAS Long Term Equity Fund are – Alphabet Inc (Google Class C), AMAZON.COM INC, Suzuki Motor Corp (ADR), Facebook INC and Nestle SA ADR.

Returns

As PPFAS Long Term Equity Fund has nearly one-third exposure in foreign stocks, comparing its performance against other diversified funds may not be the right approach.

The returns over the last 1-year and 5-year have been negative 15.61 per cent and 5.16 per cent respectively.

The benchmark returns for the 1-year and 5-year period have been negative 26.44 per cent and 1.29 per cent respectively.

Interestingly, the 5-year SIP return has been 0.77 per cent, as against the benchmark return of negative 4.47 per cent.

Overall, the fund has performed well against its benchmark over 1 and 5 year period.

Latest on the fund

The fund house in its latest Fact Sheet has informed the investors that they have added 3 new stocks in the portfolio which are ITC, MCX and Oracle Financial Services Software. And, their top three holdings are Alphabet (9.31 per cent), Amazon (9.27 per cent) and HDFC Bank (9.26 per cent ).

What can an investor do

Those investors who wish to have exposure in US stocks and also on Indian stocks across market capitalization may consider this scheme. Based on the risk profile, one may take some exposure in the scheme after consulting one’s financial advisor.

(The data and returns mentioned above are as on March 31, 2020)

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