Parag Parikh Flexi Cap Fund doubled its holdings in IGL and MGL while increasing exposure to ITC, HDFC Bank and ICICI Bank, without introducing any new stocks during May. The ₹1.42 lakh crore scheme chose to deepen existing positions rather than add new ideas to its portfolio. IGL's allocation rose from 0.45% of assets in April to 1% in May, while MGL's weight increased from 0.03% to 0.07%. Despite the significant additions, the fund maintained its core portfolio stability, with HDFC Bank continuing as the largest holding at 7.88% of assets, followed by Power Grid Corporation of India (6.41%), ITC (5.84%), Coal India (5.66%) and ICICI Bank (5.11%).
According to Mint, 33 of 38 flexi-cap funds delivered better returns than the Nifty 500 TR index, which declined 3.71% during the past year. The category average return stood at -1.29%, outperforming the Nifty 500 by 2.42 percentage points. However, this strong category performance masks significant investor concentration risk, as only 15 flexi-cap funds generated positive returns over the past year, accounting for just ₹88,000 crore of the category's ₹5.43 lakh crore asset base. In other words, only 16% of investor money was invested in funds that actually made money during this period.
The fund's most notable activity was concentrated in city gas distribution holdings, with IGL and MGL recording the biggest percentage increases. IGL's holdings increased from ₹3.79 crore to ₹8.79 crore (132% increase), while MGL's holdings more than doubled from ₹3.76 lakh to ₹8.99 lakh (139.2% increase). Other significant additions included ITC (₹24.32 crore to ₹28.79 crore, 18.4% increase), ICICI Bank (₹5.48 crore to ₹5.75 crore, 4.87% increase), and HDFC Bank (₹14.50 crore to ₹14.97 crore, 3.26% increase). The fund also increased exposure to HCL Technologies, CMS Info Systems, and Maharashtra Scooters, while maintaining its position in established holdings including Coal India, Kotak Mahindra Bank, and Infosys.
The fund's combined allocation to cash, debt and arbitrage positions declined during May, with debt and money market instruments falling by nearly one percentage point. Despite this reduction, the scheme maintains a sizeable liquidity buffer of 15.51% of assets in cash, debt and arbitrage positions. The fund's core portfolio remained remarkably stable, with only Cipla seeing a reduction of 2.26%, which appears more like portfolio rebalancing than a decisive change in investment view. Several holdings including Axis Bank, Maruti Suzuki, Bharti Airtel, TCS, Dr. Reddy's Laboratories, and Zydus Wellness remained unchanged, indicating the fund's low-turnover investment approach.
As reported by Mint, the performance gap between the two categories, in aggregate, is narrower than the structural differences might suggest. Over one year, focused funds averaged 7.02% against 6.96% for flexi-cap. Over three years, flexi-cap funds pulled ahead at 14.85% versus 14.47%. Over five years, flexi-cap again led at 13.37% against 12.97%. The current year's performance analysis reveals that while flexi-cap funds demonstrated category-level outperformance, individual fund performance varied significantly, with the best funds delivering exceptional returns while the majority of assets remained concentrated in underperforming large schemes. This pattern suggests that while category-level statistics show outperformance, investor experience depends heavily on fund selection and timing.
