Before the classification of SEBI Fund, it was earlier known as Parag Parikh Long Term Value Fund and was renamed as Parag Parikh Long Term Equity Fund and binned itself as a multi-cap fund. However, it will raise stock in almost the same way!
The fund invests in all sectors, including large, medium, and small caps. The fund has both international and Indian equity. Foreign equity investment is hedged by taking a position on currency derivatives. The fund seeks arbitration to generate further returns.
Investment strategy
The Parag Parikh Long Term Equity Fund uses similar-value investment ideas to buy reasonably strong stocks below their intrinsic values. It can spend a small portion of its AUM (15-25 percent) in international stocks and prefers to sit in cash (10 percent) if it realizes that the market is not favorable for investment or interest prospects. However, it will retain 65 percent of Indian shares (including arbitrage) in its portfolio to maintain the tax position of “equity-funds.”
Parag Parikh Long Term Equity Fund (PPLTEF) is one of only a few mutual funds Indian funds to invest in Indian and international market pools. Sometimes an Indian subsidiary of a multinational company may be highly valued, and therefore not worth the investment. However, its parent company may be available at a more reasonable price.
The theme of value investing loses its importance in almost every market period. The concept of quality provides a broad idea of how desirable business is as opposed to its intrinsic value. In value investing, the value of a business is determined in contrast to the historical importance of its present value. When a scheme applies the value concept to companies of different sizes – the multi-cap approach – then such a scheme only has an advantage over multi-cap schemes because the basic idea is to show companies a high profile with a significant increase in earnings.
Best Investment for Conservative Investors
Conservative investors should consider investing in Parag Parikh’s long-term equity in light of these factors. The scheme’s fund managers – Rajeev Thakkar, Raunak Onkar, and Raj Mehta – follow a clearly articulated approach.
They are investing in companies that do business not only in Indian markets but also in foreign markets. 65.5 percent of the portfolio of the scheme is in Indian companies, while 28.3 percent is in foreign companies.
This diversification works because these fund managers are actively investing in high-income growth companies such as Alphabet and Facebook. Another notable feature of the scheme is that their fund managers do not shy away from increasing the cash rates of the scheme when they find valuations expensive.
Performance of the scheme
The scheme has yielded 15 percent and 17 percent returns over the past three- and five-year periods, while the benchmark index Nifty 500 TRI has generated 15 percent and 14 percent returns respectively over the same period. Investors should invest in the scheme, keeping in mind the time of five years.
