PPFAS Flexi Cap Fund Increases Expense Ratio

PPFAS Mutual Fund is set to marginally increase the Base Expense Ratio (BER) for its flagship Parag Parikh Flexi Cap Fund, effective August 25, 2026.

• Direct Plan BER will rise from 0.52% to 0.53%.
• Regular Plan BER will adjust from 1.04% to 1.05%.
• The fund managed assets under management (AUM) exceeding ₹1.48 lakh crore as of July 31, 2026.

Over the six-month period between February and July 2026, the fund maintained a stable portfolio, demonstrating minimal churn. Its overall portfolio turnover registered at just 6%, with only three new acquisitions and two complete exits.

Equity allocation within the fund saw an increase from 76% in February to 81% by May, a level it sustained through July. This strategic reallocation reflects adjustments within its sector-specific exposures.

Key Sectoral Adjustments

A notable shift occurred in the IT-Software sector, with its portfolio weight growing by 3.4 percentage points from 6.9% in February to 10.3% in July.

• Diversified FMCG also gained 0.7 percentage points, reaching 5.7% of the portfolio.
• The Power sector experienced the largest reduction, decreasing by 0.9 percentage points, from 6.9% to 6.0%.
• Banks remained the largest industry exposure, holding approximately 20% of the portfolio in July, consistent with February figures.

Top individual holdings as of July included HDFC Bank at 7.5% and Power Grid Corporation at 6.2%. ITC represented 5.7% of the portfolio, while ICICI Bank held 5.6%.

• Coal India accounted for 4.9% of the fund’s holdings.

Performance Metrics Against Nifty 500 TRI

In the short term, the Parag Parikh Flexi Cap Fund underperformed the Nifty 500 TRI, registering negative alpha across several periods. This indicates a comparative lag over immediate horizons.

• Negative alpha over three months: 4.8%.
• Negative alpha over six months: 3.6%.
• Negative alpha over one year: 5.9%.

Despite short-term underperformance, the fund demonstrated robust long-term results, achieving positive alpha over two, three, four, and five-year periods. Its five-year Compound Annual Growth Rate (CAGR) stood at 13.4%.

• The Nifty 500 TRI recorded a five-year CAGR of 12.1% during the same period.