Thakkar stated in a word to the unitholders, that there could be durations when shares within the portfolio stay weak or decline, significantly as PPFAS MF typically invests in shares and sectors which can be out of favour with the market. He additionally said that the cash allocation within the flexicap fund has fallen to round 14-15% from a peak of about 25%, whereas its outlook on a basket of 4 non-public sector banks within the portfolio, together with HDFC Bank, stays unchanged.
Additionally Learn |Sensex down nearly 8% in 2026. Best time to top up your mutual fund SIPs?
Fairness returns can’t be in contrast with fastened deposits
Thakkar pushed again in opposition to issues that the fund has not delivered returns comparable with financial institution fastened deposits. He stated traders looking for assured FD-like returns ought to spend money on fastened deposits, whereas fairness investments inherently contain volatility. In keeping with him, this volatility can be what provides equities the potential to ship larger returns over the long run. He added that the market’s present rangebound section is neither uncommon in length nor important within the extent of correction.
Parag Parikh Flexi Cap Fund’s latest underperformance
Commenting on the latest underperformance of the Parag Parikh Flexi Cap Fund, the biggest lively fund and flexicap fund based mostly on property managed and managed by PPFAS Mutual Fund, Thakkar stated PPFAS schemes have delivered passable relative efficiency over a full market cycle, whereas acknowledging that short-term durations of three months, one yr or longer can see portfolio shares underperform or decline.
He attributed this partly to PPFAS MF’s technique of investing in shares and sectors that could be out of favour with the broader market. Thakkar stated the fund’s present underperformance is neither noteworthy when it comes to length nor magnitude and rejected the view that it’s primarily as a result of scheme’s giant AUM.
Thakkar added, “Money ranges peaked at about 25%. They’re right down to about 14%-15% in Flexi Cap. We’re more and more discovering alternatives to purchase, and one could sit up for single digit money ranges in a while.”He additionally defined the rationale behind sustaining larger money ranges in the course of the earlier two years. In keeping with him, the money place didn’t damage investor returns and, on the margin, helped the portfolio in the course of the sideways section of the market.
Thakkar recalled that he had skilled a a lot bigger interval of underperformance in 2007 regardless of managing a PMS corpus of simply over Rs 100 crore, arguing that fund measurement alone doesn’t clarify the latest efficiency.
HDFC Financial institution outlook stays unchanged
Whereas addressing issues over HDFC Financial institution, Thakkar stated that PPFAS MF stays comfy with its basket of 4 non-public sector banks. He famous that RBI oversight, diversified possession and powerful governance present safeguards, whereas the issues round HDFC Financial institution don’t seem to pose a fabric menace to its franchise or buyer base.
PPFAS MF is just not pushed by market-cap labels
Thakkar stated PPFAS MF invests throughout large-, mid- and small-cap shares based mostly on alternative and risk-reward, reasonably than market-cap labels. Citing valuations of 20.8 for Nifty 100, 30.7 for Nifty Midcap 150 and 34.6 for Nifty Smallcap 250, he questioned the belief that smaller firms routinely ship larger returns. He additionally urged traders to take a look at the US markets to know this dynamic.
Enhancing alternatives after market correction
Thakkar stated the fairness market’s rangebound section over the previous two years is just not uncommon, as markets can stay sideways or decline for prolonged durations. He famous that fairness returns include volatility and shouldn’t be anticipated to be predictable over quick durations. Nonetheless, the correction has improved the supply of funding alternatives, with the outlook for future returns now bettering after the broader time and value correction.
Additionally Learn | Sunil Singhania-backed Abakkus Small Cap Fund adds Indo-MIM and 2 others, exits Bank of Baroda and Cyient DLM
Not chasing standard themes and AI sell-off is a chance for IT providers
Thakkar stated PPFAS MF doesn’t chase standard themes equivalent to defence, AI, power transition or fintech, however invests the place it finds enticing risk-reward alternatives. On AI, he stated the fund home views the IT providers sell-off as a chance reasonably than an existential menace, as AI could change how work is completed with out eliminating the necessity for implementation. He added that whereas AI might displace some jobs, it might additionally create alternatives in areas equivalent to cybersecurity.
No direct publicity to OpenAI or Anthropic
Thakkar stated PPFAS MF has no direct publicity to pure-play AI mannequin firms equivalent to OpenAI and Anthropic. He famous that the more and more aggressive AI panorama means probably the most superior mannequin could not essentially emerge as the only winner, with components equivalent to sovereignty, entry, value, velocity and knowledge privateness additionally prone to play a task.
(Disclaimer: Suggestions, solutions, views and opinions given by the consultants are their very own. These don’t signify the views of The Financial Occasions)
You probably have any mutual fund queries, message on ET Mutual Funds on Fb/Twitter. We’ll get it answered by our panel of consultants. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, threat profile, and twitter deal with
as a Dependable and Trusted Information Supply
