An open ended dynamic Equity scheme investing across
large cap, mid cap, small cap stocks!
Nothing is permanent: Stockmarkets are cyclical. What goes up today may come down tomorrow. Hence, concentrating all our investments in one market is not prudent, especially in today's times when it is fairly easy to invest globally via mutual funds.
'Country Risk' can bite you: Most mutual fund schemes help you diversify across industries within India. However, you could still be affected if there are negative events within (such as war, drought, political turmoil etc.). Investing across countries helps to reduce this risk.
Why miss out on nearly 98%?
India's market-capitalisation is currently around 2.18% of the global market-cap. as at June 22, 2020* Hence, by ignoring the rest of the universe, we could be missing out on several opportunities.
*Source: Financial Express
Different markets dance to different tunes
Local factors affect every market, and the stocks listed therein. This leads to periods of huge divergence between markets. Being exposed to more than one market may help capture some of this.
| Index | Returns (Jan. 1, 2015 to Sept. 12, 2021) | Returns (Jan. 1, 2012 to Dec. 31, 2014) |
|---|---|---|
| Dow Jones Industrial Average – USA | 10.34 | 12.86 |
| FTSE 100 Index – United Kingdom | 1.15 | 4.83 |
| Hang Seng Index – Hong Kong | 0.75 | 7.74 |
| IBOVESPA SAO PAULO Index – Brazil | 15.14 | -4.73 |
| KOSPI Index - South Korea | 6.61 | 1.62 |
| Nifty 50 Index – India | 12.03 | 21.34 |
| Nikkei Index – Japan | 7.25 | 27.40 |
| *Source: Bloomberg | ||
Reducing portfolio volatility: Diversifying across countries also helps to reduce the volatility of the portfolio. Lower fluctuations in the Net Asset Value (NAV) mean greater peace of mind…
Local markets may lack variety: There are several world-class companies which do not have Indian subsidiaries who are listed (Eg. Coca Cola, Nike, Samsung). Also, there are innovative companies making certain products/services for which there are no Indian substitutes. When we invest abroad, our investors get a chance to benefit from the performance of such global leaders.
For instance, the US market offers wider options to invest in software product companies or pharmaceutical innovator companies compared to the Indian stockmarket.
Valuations may differ: Surprisingly, a domestic subsidiary's Parent company may be available at a more attractive valuation abroad.
A representative sample is provided here:
| Company | PE Ratio (Overseas) | PE Ratio (NSE) |
|---|---|---|
| Nestle | 25.74 | 88.68 |
| Pfizer | 15.17 | 50.81 |
| Suzuki | 10.60 | 52.86 |
| Cummins | 15.53 | 39.09 |
| ABB | 72.81 | 170.29 |
| *Source: Bloomberg | Date: September 12, 2021 | Illustrative Purposes only | ||
In such a case, investors could diversify simply by purchasing the Company abroad. Also, in many cases, the Parent earns royalty from its foreign subsidiaries, and by owning the parent one could benefit from this.
Globally diverse...yet tax-friendly
As PPFCF invests a minimum of 65% in Indian equities, it enjoys the same Capital Gains Tax benefits as any other Indian equity scheme. Hence diversification does not result in any tax disadvantage.
Invest in Parag Parikh Flexi Cap Fund if you too want to benefit from international diversification
Yes. As 66% of the portfolio will be invested in Indian companies, our investors will pay a lower rate of tax, as shown in the table along side
| Particulars | 65% and above | Less than 65% |
|---|---|---|
| LTCG Tax | 10% without indexation | 20% after indexation |
| Qualifying period | One year | Three years |
The investment objective of the Scheme is to seek to generate long-term capital growth from an actively managed portfolio primarily of equity and Equity Related Securities. Scheme shall be investing in Indian equities, foreign equities and related instruments and debt securities.
Lumpsum
New Purchase:
₹ 1,000 and in multiple of ₹ 1 thereafter.
Additional Purchase:
₹ 1,000 and in multiple of ₹ 1 thereafter.
Systematic Investment Plans
Monthly SIP:
₹ 1,000 and in multiple of ₹ 1 thereafter.
Quarterly SIP:
₹ 3,000 and in multiple of ₹ 1 thereafter.
Direct Plan: Do-It-Yourself and benefit from a lower 'Expense Ratio'.
Regular Plan: Choose this option if you would like one of our Distribution Partners to help you out.
For both the above plans scheme offers only "Growth Option" and no "Dividend option".
Entry Load: Not Applicable
Exit Load:
In respect of each purchase / switch-in of Units, 10% of the units (“the limit”) may be redeemed without any exit load from the date of allotment.
Any redemption or switch-out in excess of the limit shall be subject to the following exit load:
2.00 % if the investment is redeemed on or before 365 days from the date of allotment of units.
1.00 % if the investment is redeemed after 365 days but on or before 730 days from the date of allotment of units.
No Exit Load will be charged if investment is redeemed after 730 days from the date of allotment of units.
No exit load will be charged, in case of switch transactions between Regular Plan and Direct Plan of the Scheme for existing as well as prospective investors.
Its investment universe is not restricted by any self-imposed limitations in terms of sector, market capitalisation, geography, etc. However, an average of 65% of its corpus will be invested in listed Indian equities, in order to benefit from the favourable Capital Gains tax treatment accorded to such schemes.
| Name | Sector | % of Assets |
|---|---|---|
| Housing Development Finance Corporation Ltd. | Finance | 7.81% |
| ITC Ltd. | Diversified FMCG | 7.63% |
| Bajaj Holdings & Investment Ltd. | Finance | 7.53% |
| ICICI Bank Ltd. | Banks | 5.57% |
| HCL Technologies Ltd. | Power | 5.34% |
| Axis Bank Ltd. | Banks | 5.06% |
| Name | Sector | % of Assets |
|---|---|---|
| #Microsoft Corporation | Internet & Technology | 4.94% |
| #Alphabet Inc (Google Class A) | Internet & Technology | 4.47% |
| #Amazon.Com Inc | Consumer Services | 3.32% |
| #Meta Platforms Inc (Formerly Facebook Inc) | Internet & Technology | 2.77% |
| #Suzuki Motor Corp (ADR)^ | Automobiles | 0.55% |
As at February 28, 2023, 70.15% is invested in Indian equities and 16.05% is invested in foreign equities. The residual 12.41% is parked in TREPS etc. & Fixed Deposit Receipts (FDR). Scheme Factsheet here.
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The investment objective of the Scheme is to seek to generate long-term capital growth from an actively managed portfolio primarily of Equity and Equity Related Securities. Scheme shall invest in Indian equities, foreign equities and related instruments and debt securities.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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