All you need to know about Parag Parikh Flexi Cap Fund Direct Growth

Flexi cap funds are among the most popular investment instruments in the country, and for a good reason. They have historically offered more returns than any other investment route.

If you are planning to invest in Flexi cap funds, you should consider Parag Parikh Flexi Cap Fund Direct Growth.

This article will offer everything you need to know about the fund. 

What exactly are Flexi-Cap Funds?

A flexi-cap mutual fund enables investors to spread their investment portfolio among firms with varying market capitalizations, reducing volatility and risk. They are also known as multi-cap funds or diversified equity funds. Unlike small-cap funds or mid-cap, which invest in companies based on market capitalization, flexi-cap mutual funds can choose to invest in any firm regardless of its market value.

The fund manager evaluates the development potential of numerous firms, irrespective of size, and allocates funds to various market categories and companies.

Parag Parikh Flexi Cap Fund Direct Growth Details

Net Asset Value: Rs. 48.2078 (as on 18.07.2022)

Fund: The fund invests 70.85 per cent of its assets in domestic equities, with 57.52 per cent in Large Cap companies, 2.75 per cent in Mid Cap shares, and 9.71 per cent in Small Cap shares.

Suitable For:

When you invest in this fund for at least five years or longer, you can expect profits that comfortably outperform inflation and fixed income returns. However, be ready for highs and lows in the value of your investment along the road.

This mutual fund is a flexi-cap option, which means that the fund’s management team has total discretion to invest in firms of varying sizes based on where it anticipates making the most money. Flexi-cap funds are best suited for equities fund investors since the work of stock picking is entirely left to the fund manager, which is the whole point of dealing with a mutual fund.

Investing in this fund exclusively through the SIP approach is highly recommended, as you should with any other equity fund.

Tax:

Here is how your returns from this flexi-cap mutual fund will be taxed:

• Capital Gains
  • Gains up to Rs. 1,00,000 in a fiscal year are tax-free if the fund units are liquidated after one year from the investment date.  Gains above Rs. 1,00,000 are taxed at a fixed rate of 10%.
  • In case the fund units are sold one year from the investment date, the full gain will be subject to taxation at a fixed rate of 15%.
  • You do not need to pay any tax if you are keeping the units.
• Dividends
  • Share dividends are included in an investor’s income and taxed as per their respective tax bracket. In addition, if an investor’s income from dividends exceeds Rs. 5,000 within a fiscal year, the mutual fund house charges a 10% TDS before releasing the payout.

Note: If you feel like you would have to redeem your mutual fund investment in five years or less, it is recommended to not invest in this fund or any other flexi-cap mutual fund. If you are looking for a long-term return on your investment, Parag Parikh Flexi Cap Fund Direct Growth is among the best options. If you are looking for something more short-term, you might consider some other options.

Why invest in Flexi-Cap Funds?

Flexi-cap funds provide a diverse portfolio, which helps the investor manage both risks and returns. These investments are also noted for providing consistent returns even during weak market periods. In addition, the mutual fund manager can opt to evaluate the fund distribution and swap between different firms and sectors based on results.

For instance, if the mutual fund manager discovers that a certain market sector in which the fund has invested has become unappealing over time, he or she might shift the investment to a different market sector that has recently performed better. This provides investors with the advantage of not only engaging in the best-performing equity fund but also having the opportunity to withdraw from the least appealing choices.

Market capitalization is a factor to consider when selecting firms to invest in through mutual fund houses. Market capitalization not only shows the scale of a firm but also other qualities that investors consider, such as track history, potential growth, as well as the risk associated with these firms.