A few month in the past, Parag Parikh Flexicap Fund determined to cease recent inflows into its flagship scheme. It reopens as we speak.
Why did it cease, within the first place?
Nicely, the general overseas funding restrict for the mutual fund business and every fund home has been outlined within the laws. The business was very near reaching that restrict and to make sure that the state of affairs 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 purported to be non permanent doesn’t appear like that anymore. The regulators (SEBI with RBI) needed to come out with the long run plan of action and updates, however there was no information thus far.
So, why open up now?
The wait has been too lengthy and the home market, not less than, 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 still proceed to spend money on overseas securities to some extent, it received’t find a way to take action, if general business restrict is breached.
There’s 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 development 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 alter, does it nonetheless stay related for the portfolio.
Nicely, 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 dangerous.
If for an extended interval, the worldwide avenues don’t open up, then buyers must decide different choices to offer for the worldwide diversification.
Test along with your advisor, what’s the most effective plan of action in your portfolio.