According to reports from Essential Business Intelligence, Parag Parikh Flexi Cap Fund's cash levels have decreased from a peak of 25% to the current 14-15%. Chief Investment Officer-Equity and Director at PPFAS Mutual Fund, Rajeev Thakkar, indicated that the fund house expects to move toward single-digit cash levels in the future. Thakkar explained that holding cash during the sideways market had not hurt investor returns and had helped 'at the margin' during the current period. In his latest note to unitholders, Thakkar emphasized that the fund house had been guiding caution since the market exuberance of 2024, which was 'mocked' at the time for its rising cash levels.
As reported by Essential Business Intelligence, Thakkar addressed growing investor concerns about the fund's underperformance, describing recent scrutiny as driven by 'noise on social media'. He noted that two years of range-bound equity markets are a 'feature and not a bug' of equity investing, and emphasized that the current period of underperformance was 'not noteworthy' in either duration or magnitude. Thakkar stated that the outlook for returns 'appears to be improving' and that the fund house had been guiding caution since the market exuberance of 2024, which was 'mocked' at the time for its rising cash levels. He pointed out that the two years of time correction had thrown up more opportunities for the fund.
According to Essential Business Intelligence, Parag Parikh Flexi Cap Fund is the largest actively-managed equity scheme in India by assets, having become the first active fund to cross the ₹1-trillion AUM mark in May 2025. Thakkar cited Screener.in data as of August 4, showing the Nifty 100 trading at a PE of 20.8, against 30.7 for the Nifty Midcap 150 and 34.6 for the Nifty Smallcap 250. He emphasized that it was not 'a law of physics' that smaller companies deliver higher returns.
As reported by Essential Business Intelligence, Thakkar defended the fund's exposure to HDFC Bank, stating that issues reported at the bank did not appear to threaten its customer franchise. He maintained that the outlook on its basket of four private banks remained unchanged. On AI-related concerns, Thakkar called fears of AI-led job losses 'largely overblown at the aggregate level', drawing parallels with earlier fears around bank computerisation. The fund has no direct exposure to pure-play AI model companies, and Thakkar noted that any capex overcapacity was likely to be cyclical rather than permanent. On hyperscaler holdings, he said these companies retain core businesses beyond AI.
According to Essential Business Intelligence, Thakkar pushed back on prevailing worries around India's lack of homegrown AI models, capital gains taxes, the Securities Transaction Tax and the rupee, calling these recurring 'manic/depressive mood swings' rather than new developments. On IT services, he said the current sell-off in the sector was viewed as an opportunity rather than a threat. Regarding IEX, he noted that market-coupling concerns applied to a sub-1% portfolio position and that the view that the exchange's market share would fall to a third of the total market was 'simplistic'.
