A couple of month in the past, Parag Parikh Flexicap Fund determined to cease recent inflows into its flagship scheme. It reopens at present.
Why did it cease, within the first place?
Properly, the general overseas funding restrict for the mutual fund business and every fund home has been outlined within the rules. The business was very near reaching that restrict and to make sure that the scenario didn’t come up, all funds with worldwide funding mandates determined to cease taking new inflows, quickly.
Parag Parikh Flexicap Fund invests about 30% of its portfolio in shares outdoors India. As a precautionary measure, the fund additionally taking stopped recent investments.
What was speculated to be non permanent doesn’t appear like that anymore. The regulators (SEBI with RBI) needed to come out with the longer term plan of action and updates, however there was no information to this point.
So, why open up now?
The wait has been too lengthy and the home market, at the least, is throwing up alternatives. Holding that in thoughts, the fund home has determined to divulge heart’s contents to recent inflows.
Whereas PPFAS as a fund home should proceed to spend money on overseas securities to some extent, it gained’t have the ability to take action, if general business restrict is breached.
There may be one other factor. If the fund will get a considerable amount of new investments, will probably be compelled to take a position them in India securities solely. This implies the ratio of overseas securities will go down (specifically vis a vis its historic holding pattern of about 30% of the portfolio).
The fund has an AUM of Rs. 20,000 crores.
Do you have to proceed to spend money on Parag Parikh Flexi Cap fund?
Apparent query for many buyers. If the portfolio construction is about to vary, does it nonetheless stay related for the portfolio.
Properly, the fund’s experience or investing fashion has not modified. It makes use of worldwide shares to get entry to all kinds of companies.
With the chance set at present restricted to India, there does appear to be a handicap rising. Nevertheless, it doesn’t make the fund unhealthy.
If for an extended interval, the worldwide avenues don’t open up, then buyers should decide different choices to supply for the worldwide diversification.
Examine along with your advisor, what’s the most effective plan of action on your portfolio.
