Disclosure: This is not a recommendation to buy, hold, or sell Parag Parikh Flexi Cap Fund. Our advisory clients may have allocations to this fund based on their risk profile, financial goals, and overall portfolio construction.
The iconic Parag Parikh Flexi Cap Fund has been going through a relatively difficult phase. Returns over the last two years, whether measured through SIPs or lump-sum investments, have not been particularly impressive. Many investors who were attracted solely by its past performance are now feeling disappointed. Some may have invested directly without first assessing whether the fund suited their financial needs and objectives.
Our thoughts are as follows:
1. Any equity fund should ideally be held for at least five years. PPFAS has consistently communicated this from the very beginning.
2. Despite recent underperformance, the fund's 3-year, 5-year, and 10-year track records remain respectable and attractive.
3. Equity returns are never linear. Periods of outperformance are often followed by phases of underperformance.
4. No single product or strategy should dominate a financial portfolio. Meaningful but measured allocations allow investors to participate in the upside while limiting the impact of temporary setbacks.
5. Focus on long-term rolling returns rather than short-term annual returns. Rolling returns provide a better indication of consistency and investment merit.
6. Do not select a fund solely because it has performed well in the past. Understand and evaluate the investment philosophy behind the strategy.
So, what should an investor do?
Our suggestion is simple: sit down with your financial planner and reassess your financial goals, circumstances, and risk profile. The discussion should begin with you and your objectives—not with the mutual fund.
At Naveen Rego Capital, a fee-only wealth management firm and SEBI Registered Investment Adviser, we do not select funds or strategies based solely on recent performance. Portfolio construction focuses on diversification, low overlap, multiple investment approaches, and avoiding excessive concentration in any single idea.
We believe that performance is ultimately a by-product of a disciplined and well-executed process. At Naveen Rego Capital, that process starts and ends with our clients.
Happy Financial Planning!
Naveen Julian Rego – CFP®
MD & Principal Officer
Naveen Rego Capital
SEBI Registered Investment Adviser
Reg No: INA000019211
BSE Membership ID: 2178
Disclaimer:
1. Investment in the securities market is subject to market risks. Read all related documents before investing.
2. Registration granted by SEBI, enlistment as IA with Exchange, and certification from National Institute of Securities Market (NISM) in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
3. Financial products recommended by us that are under the jurisdiction of other regulators are beyond the scope of SEBI’s grievance redressal mechanism.
