Parag Parikh Long Term Equity Fund – a local fund with global focus, as it is free to invest up to 35% of its corpus in businesses listed overseas. This, without sacrificing the relatively preferential capital gains tax treatment available to pure India-focused Equity Funds completes 7 years of wealth generation.
The Scheme adheres to the tenets of Value investing while selecting companies:
- They should have low debt, high cash flows and be led by investor-friendly managements.
- They must be quoting at a discount to their intrinsic value at the time of purchase.
It is also a ‘go-anywhere open-ended diversified Equity Scheme’ free to invest in companies of any size and in any sector. There is no restriction in selecting companies with respect to Market cap. Wherever the opportunity arises be it Mid, Small or Large cap it can invest. The fund is also eligible to take advantage of ‘special situations’ like Delisting, Merger, Buybacks etc and arbitrage opportunities whenever they arise.
This global and local diversification, coupled with the freedom to remain in cash when the investment climate is unfavourable, helps in reducing sharp fluctuations in its Net Asset Value (NAV). And this has helped the fund to beat the category average by a very wide margin.
Below is the latest performance snapshot of the fund:
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020(YTD) | Simple Average | Compounded Average |
| 44.82 | 8.94 | 3.28 | 29.36 | -0.43 | 14.43 | -3.17 | 13.89 | 14.48 |
All returns in Percentage. Calendar year returns are absolute.Source Valueresearch
CAGR since inception of the scheme is 14.48% vs Category average 10.89%. Year to Date (YTD) returns is -3.17% and the category average is – 15.54%.
The fund was sitting in cash so it could arrest the fall in NAV and use that cash to buy beaten down stocks which will help the fund when the market trends up.
The fund still has around 5% in cash and runs a very concentrated portfolio of just 20 Indian stocks and 4 stocks listed overseas.
This is must have in everyone’s portfolio. Detailed note about this fund can be viewed here
Happy Investing! here
R♥Vi
Disclaimer: The information contained in this document is compiled from third party and publically available sources and is included for general information purposes only. Views expressed cannot be construed to be a decision to invest. The statements contained herein are based on current views and involve known and unknown risks and uncertainties. The recipient(s) before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice.
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