PPFAS Mutual Fund’s flagship scheme – Parag Parikh Flexicap Fund to reopen for investment from Mar 15

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PPFAS Mutual Fund has announced that it will reopen for investments from 15th Mar. SEBI had asked mutual funds to stop fresh lump sum and SIP investment into funds that invest in foreign securities from 2nd Feb 2022 in order to avoid breach of the overseas investment limit of US $7 billion.

There is no update on the increase of overseas investment limit for mutual funds. Parag Parikh Flexicap Fund had suspended fresh lumpsum and SIP investment from 2nd Feb. PPFAS got feedback from investors that they would like to benefit from lower stock prices and invest in Parag Parikh Flexicap Fund. There was confusion among investors who have registered their SIPs through different platforms. Considering this, PPFAS Mutual Fund will reopen investment into their flagship scheme – Parag Parikh Flexi Cap Fund from 15th Mar 2022.

Rajeev Thakkar, CIO and Director of PPFAS Mutual Fund mentioned in a note – “As of now we have no visibility on if / when and by how much the limit for overseas investments will be revised. As I write today, there is a conflict going on between Russia and Ukraine, Crude Oil prices have risen and the Indian Rupee has fallen somewhat. If and when the limits are increased, and if it is of a relatively small amount, the same will get exhausted soon. In such a scenario, having funds readily available will be advantageous rather than opening the scheme after the limit increase only to see the industry-wide cap get breached again.”

Parag Parikh Flexicap Fund invests around 30% in foreign stocks. As of Feb-22, fund’s top 3 holdings are Alphabet(9.04%), Bajaj Holdings & Investment(8.17%) and ITC(8.04%). Since there is no change in overseas investment limit, fresh inflows will have to be invested in domestic equities. Due to this, weightage of foreign stocks in Parag Parikh Flexicap Fund is expected to come down. Once the overseas limits are increased, portfolio will be rebalanced according to prevailing situation and valuations.

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