How The New PPFAS Large-Cap Fund Differs From Its Flagship Flexi-Cap Fund

The Parag Parikh Financial Advisory Services’ PPFAS Mutual Fund raised the excitement levels among investors in the financial market recently. The boutique fund house, which has retained its strong footing in the money world despite running a single equity fund for over 12 years, has now revealed plans for a sequel in the often tricky large-cap mutual fund space.

True to its historic traits and image, the PPFAS has gone for a different path for its next large-cap ambition. Whether or not this sequel to PPFAS’s long-running mutual fund scheme elevates its status as a market player remains to be seen. But for now, the interest and expectations among the investors have made it a topic of discussion.

PPFAS Mutual Fund

For beginners, the PPFAS mutual

fund scheme has gained its weight and steam by running India’s largest equity fund, Rs. 1.25 trillion Parag Parikh Flexi Cap Fund, with a distinct approach. The mutual fund follows the ‘Swiss army knife’ philosophy, investing funds anywhere across market caps, geographies and assets depending on profitability. As its unique standing and long-term execution continue to pay rich dividends and stand it apart from its peers, the PPFAS has kept operating with great resolve without introducing any look-alike funds.

Such a fund house will only introduce a new fund if it believes it can materially differentiate itself from the rest. The giant firm is now ready to test its experience and longevity in the large-cap category, where outperformance hasn’t been easy to reach for many.

How The New PPFAS Fund Differs From Flexi-Cap Fund

To enable its news pursuit, the PPFAS plans to deviate sharply from its traditional strategy that supports its flagship offering. Taking a break from its conventional and value-conscious approach, the large-cap offering of the firm will operate on a rules-based and index-centric portfolio.

The new PPFAS fund scheme will run a low active share and invest differently weighted funds in the same constituents as the Nifty100 index. By making intelligent executions in the field instead of basic superior stock picking, the PPFAS plans to outsmart the index. The firm will actively seek opportunities coming out of mispricing in index and stock futures, index rebalancing and merger or demerger events.

The fund aims to benefit those eyeing broad diversification and index-like returns and also investors who are wary of heavy underperformance and like a low expense ratio. The new fund, however, is not quite meant for those who like concentrated bets on select stocks and sectors and want active stock selection based on fundamentals. Investors who eye significant outperformance over the index and expect the fund manager to avoid overvalued pockets wouldn’t also prefer the scheme.