INTRODUCTION
Historically, mutual funds have offered safety and a diversified platform to the investing party so that they can generate good returns on their investments. It helps you to pool your money with the investors mutually and earn good profits. Similarly, among its peers PARAG PARIKH FLEXI-CAP FUND has become the second-largest fund for a seven-year-long period which speaks to its character of being consistence. This fund offers long term capital growth and actively manages your portfolio towards profits. The launch date of this fund is 05-05-2013. Let’s figure it out if Parag Parikh Flexi Cap Fund is beneficial for your investment. In this article we will dive into some advantages and disadvantages, about the fund manager and their strategy, who should invest.
ADVANTAGES of Parag Parikh Flexi Cap Fund
1. DIVERSIFICATION –
Under this strategy, the fund manager often divides its securities into various different categories that help the investing party to diversify their portfolio and enhance their chances to make profitable returns. Flexi-cap funds are categories into three categories, large-cap, mid-cap and small-cap.
2. PROFESSIONAL MANAGEMENT –
These funds are regularly monitored and taken care of by a professional person that is assigned to monitor your portfolio’s performance.
3. FAIR PRICING –
This technique circles around by knowing the price that the investors are ready to pay, where-in the final amount set by the company meets the expectations of its buyers.
4. DIVIDEND REINVESTEMENT –
To break it down, it’s a method where-in the investors buy more funds in the same company that they are already invested in rather than engaging in new funds which can give uncertain results. Already being a shareholder of a particular fund provides a positive edge to the investors.
DISADVANTAGES of Parag Parikh Flexi Cap Fund
1. RISK FACTOR –
While investing in mutual funds helps us to generate good profits on our investments but as it says everything comes with a price. Funds always comes with liquidity risk, but we often have to push ourselves and take a risk from time to time to move mountains
2. EVALUATION –
The fund manager always seeks to achieve the correct and profitable analysis of the market but as the nature of fund suggest which are subjected to market changes makes it a challenging job to ensure a positive outcome at all times.
3. TAX INEFFICIENCY –
When the investors try to skip paying taxes or they under pay the tax as required by the law, they create a problem for themselves.
4. POOR TRADE EXCECUTION –
Basically, trade execution comes right when the exchange of funds is executed at a desired price. If not, the investor is unable to take advantage of price movements.
Let’s understand the fund manager strategy
Raunak Onkar, Rajeev Thakkar, Raj Mehta are the current fund managers of this mutual fund. They provide an efficient team that works together and focus on their primary goal which is to deliver the highest returns to their investors who believe in their guidance and strategy.
IMPLEMENTED STRATEGY
At a higher level the top best strategies implemented are as follows-
1. GROWTH INVESTING –
This strategy includes targeting companies with innovative ideas and services offered to the investors as they show a very strong position in this market.
2. VALUE INVESTING –
This investing style refers to buying of assets such these funds as a price that is below their actual value with the sole purpose of selling them to a higher profit in the near future and gain a considerate profit margin.
3. QUALITY INVESTING –
To understand how good a fund is, its quality is checked by learning its earnings and balance sheet of the company that provides the investor with an idea about how much money is already been invested into it.
4. BUY AND HOLD –
In simpler forms, keeping faith in the invested funds and not dropping them during hard times explains this concept. It works wonders for long-term investors.
WHO SHOULD INVEST
INVESTORS LOOKING TO DIVERSIFY –
Instead of putting all our eggs in one basket we should seek to apply the simple formula of divide and rule. Investors who are looking for a diversified and balanced portfolio should certainly invest in this scheme.
RETAIL INVESTORS –
The more likely option for these investors as it provides an easy and accessible platform which is more suitable for them to buy and sell their commodities without going to great lengths.
GROWTH-ORIENTED INVESTORS –
This strategy embarks upon focusing on increasing the invested capital. This fund provides growth opportunities for achieving substantial returns on investment. Investors looking to invest in these type of companies expects to earn and increase their share as compared to their industry sector or the overall market.
CONCLUSION
While, bearing in mind that this fund has always recovered from short-term underperformances. This fund gives its investors a chance to create generational wealth, diversify their portfolios, make long-term goals achievable.
Ideally, for beginners who have fewer resources and low liquidity needs can choose to invest their money into this fund which will enable them to make a good profit at minimal risk.
As for beginners, the concept of Online SIP, a systematic investment plan allows the users to invest in small amounts with minimal risks thus, earning considerate profits from them.
To wrap it up, in the advancing era of a growing economy, it is important to secure one’s money and build assets for the future.
Mutual funds provide one such option for investors to generate returns. Rather than going the old-fashioned way and keeping the savings under the mattress, it’s time to try the new way, and smartly invest the money with accurate knowledge of the ongoing market.