PPFAS Mutual Fund :: Parag Parikh Long Term Equity Fund

Local fund with Global focus

Global advantage... without any tax disadvantage.*

Parag Parikh Long Term Equity Fund (PPLTEF) is one of only a handful of Indian mutual fund schemes to invest in a basket of Indian and foreign stocks.

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Five reasons why we have chosen to be different are:

Reducing ‘country risk’

Most equity mutual fund schemes help investors diversify across industries within the same country. However, investors could still be affected if there are negative events throughout the country (such as war, drought, political turmoil etc.). Investing across countries helps to reduce this risk.

Winners keep rotating

Different markets perform well at different times and it is virtually impossible to predict who will be the next winner. Also, there will be times when the Indian stockmarket may underperform others. By diversifying abroad, we reduce the risk of our investors losing out when this happens.

Reducing portfolio volatility

All stockmarkets do not always move at the same pace or in the same direction. Hence, investing across countries helps to reduce the volatility of the portfolio. Lower fluctuations in the Net Asset Value (NAV) mean greater peace of mind…

Wider choice

There are several world-class companies which do not have Indian subsidiaries who are listed. 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.

Valuations

Sometimes, the Indian subsidiary of a multinational company may be very highly valued, and hence not investment-worthy. However, its parent company may be available at much more reasonable valuation. We can take advantage of such situations. We employ the same time-tested principles of value investing while choosing both, Indian and foreign stocks.

What about the foreign currency risk?

We prefer to concentrate on stock-picking rather than forecast currency movements. However, we reduce the risk of our investors losing due to sharp currency appreciation of the Indian rupee, by hedging approximately 80% of our foreign exposure through Currency Contracts..

As the Forward rate of the Indian Rupee is usually at a premium to the Spot Rate, our investors often earn an additional yield (Currently 5-6% per annum), irrespective of how the underlying stocks perform.

Please note: This yield may or may not sustain in the future, as it depends on factors like interest rate & inflation differentials between two currencies, which cannot be predicted with much accuracy.

Our investment shortlist

First of all, we prefer countries where stockmarkets are well-developed, good governance is in place, financial statements are prepared in English and stockmarkets are liquid.

Within these countries, we seek companies which are large, have operations in multiple countries and are reasonably valued.

Currently, we are focusing on companies listed mainly in the USA as we have access to a large universe of companies which possess all these attributes.

Is this portfolio tax-friendly?

Yes. As 65% of the portfolio will be invested in Indian companies, our investors will pay a lower rate of tax, as shown in the table alongside.

% Holding of Indian Equities

Particulars	65% and above	Less than 65%
LTCG Tax	10% without indexation	20% after indexation
Qualifying period	One year	Three years

*‘Tax disadvantage’ refers to higher ‘Capital Gains Tax’ paid by investors in other ‘global’ equity mutual fund schemes

Riskometer

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 this scheme is suitable for them.

Download SID/SAI and KIM here.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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Key Information Memorandum [KIM]

Scheme Information Document [SID]

Name of the Scheme

Parag Parikh Long Term Equity Fund

Investment Objective

To seek to generate long term capital growth from an actively managed portfolio of equity and equity related securities.

Type of the scheme

An open ended equity scheme investing across large cap, mid cap, small cap stocks.

Date of Allotment

May 24, 2013

Minimum Application Amount

New Purchase: ₹ 1,000;
Additional Purchase: ₹ 1,000;
Monthly SIP: ₹ 1,000;
Quarterly SIP: ₹ 3,000;

Expense Ratio ^*

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Entry Load

Not Applicable

Exit Load

2.00 % if the investment is redeemed or switched on or before 365 days from the date of allotment of units
1.00 % if the investment is redeemed or switched 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 or switched after 730 days from the date of allotment of units.

Parag Parikh Long Term Equity Fund

Local fund with Global focus

Five reasons why we have chosen to be different are:

% Holding of Indian Equities

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