Top 3 Funds from Parag Parikh Mutual Fund

Since its inception in 2013, Parag Parikh Mutual Fund has earned the trust of investors over the years. Today, it's among the most popular fund houses.

As of July 2025, the fund house is managing assets to the tune of nearly Rs 1.3 trillion (tn).

It's promoted by Parag Parikh Financial Advisory Services. Ltd (PPFAS Ltd), a boutique investment advisory firm incorporated in 1992.

Parag Parikh Mutual Fund follows robust investment processes and systems guided by the principles of value investing.

The fund house is guided by the 'Law of The Farm', which states that everything takes its own time, and hastening the process will be counterproductive. This is in sync with its tortoise logo, which stands for longevity and wisdom.

It also does not believe in complicating the investment process and strives for simplicity, even in the scheme design.

Currently, the fund house offers six mutual fund schemes, with Parag Parikh Flexi Cap Fund being its flagship scheme.

The other popular schemes from the fund house are Parag Parikh ELSS Tax Saver Fund and Parag Parikh Liquid Fund. These three are the largest schemes of the fund house by AUM.

In this editorial, we explain these schemes considering their quantitative factors, which include 6-month, 1-year, 3-year, and 5-year rolling returns along with risk-reward ratios - standard deviation, sharpe, sortino, and up/down capture ratio.

#1 Parag Parikh Flexi Cap Fund

Launched in May 2013 as Parag Parikh Long Term Value Fund, it was rechristened in December 2020, following changes in scheme categorisation and rationalisation norms of the regulator, which allowed the fund to follow a flexi-cap strategy.

Over the years, its assets under management (AUM) have increased, and today it is the largest fund in the flexi-cap fund category with an AUM of over Rs 1.13 tn.

It is a diversified equity fund investing across market capitalisations but with a flexi cap approach, and with no limitations in terms of sectors, geography, etc.

A flexi-cap approach allows it to identify high-potential opportunities from a large universe of stocks and better adapt to changing market trends.

To identify stocks, a bottom-up approach is used. It prefers stocks trading at attractive valuations with strong fundamentals. This potentially helps in reducing the downside risk and benefit during the up moves of the market.

The underlying portfolio of the fund usually tilts towards large-cap stocks with tactical allocations in mid-cap and small-cap stocks.

As per its July 2025 portfolio, the fund is holding over 60% allocation to domestic largecaps, and around 2% each in midcap and smallcaps. It is also holding nearly 12% of its assets in overseas equities, in stocks such as Meta Platforms, Microsoft, Alphabet, Amazon, etc.

The fund is also holding a little over 10% of its assets in cash & cash equivalents, around 10% in debt & money market instruments, and 0.5% in REITs & InvITs.

The fund holds its stocks with a long-term view, even if the stocks are going through a difficult phase. In the last one year, the portfolio turnover ratio of the fund has been in the range of 20-40%.

Parag Parikh Flexi Cap Fund holds around 50-60 stocks in the portfolio. However, this number has increased to 80-90 stocks in recent months, which can be attributed to its growing asset size.

As per the July 2025 portfolio, the fund is holding 78 stocks. Among them, the top 10 comprise nearly 50% of the portfolio and include names such as HDFC Bank (7.9%), Bajaj Holdings & Investments (6.6%), Power Grid Corporation (5.9%), etc.

The top 3 sectors of the fund are banks (29.1%), IT (9.6%), and finance (8.2%), comprising about 47% of the current portfolio.

The strategy followed by the fund has rewarded its investors well for the risk taken. Over the last 3-year and 5-year periods, the fund has delivered compounded annualised rolling returns of 22.9% and 22.8%, respectively.

With this, the fund has outperformed its benchmark Nifty 500 - TRI and has also outpaced most of its category peers.

The fund has achieved this while keeping the volatility in check, resulting in superior risk-adjusted returns. Even in depressed market conditions, the fund has proved its resilience.

#2 Parag Parikh ELSS Tax Saver Fund

Launched in July 2019, this equity-linked savings scheme (ELSS) or tax-saving mutual fund has an impressive track record, securing its place among the top performers in its category.

It invests a minimum of 80% of its total assets in equity and equity-related instruments as per the Equity-Linked Savings Scheme 2005, as notified by the Ministry of Finance, and comes with a mandatory lock-in period of 3 years.

It has the freedom to invest in domestic companies across market capitalisations and sectors or industries that appear to be attractively valued. It also participates in buy-backs and other special situations within India.

It follows value investing principles, where it avoids overpaying, prefers purchasing cash-generating low debt businesses with good managements. It avoids periodic fads and fancies in the stock market.

Moreover, the fund's focus on Environmental, Social, and Governance (ESG) factors adds an extra layer of prudence, making it appealing to investors who prioritise responsible investing.

Overall, a bottom-up approach is followed.

The fund usually holds a compact portfolio of 30-35 stocks. As per its July 2025 portfolio, the fund has 33 stocks, of which the top 10 comprise nearly 57%. Bajaj Holdings & Investments (8.5%), HDFC Bank (8.2%), Maharashtra Scooters (7.3%), etc., are among the top holdings.

The top 3 sectors of the fund are banks (29.9%), finance (17.5%), and IT (11.2%).

The fund has delivered appealing returns. Over the last 3-year and 5-year periods, it has delivered a CAGR of 23.6% and 25.9%, respectively, outperforming the Nifty 500 - TRI and many of its peers.

Moreover, Parag Parikh ELSS Tax Saver Fund has managed its risk well (as denoted by the Standard Deviation of 9.55) and compensated investors on a risk-adjusted basis (as denoted by the sharpe and sortino ratios of 0.41 and 0.96, respectively).

The fund has shown its ability to perform well in both bullish and bearish market conditions.

Investment in this fund in the financial year is entitled to a deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act.

Performance of Equity Funds of Parag Parikh Mutual Fund

	1 Yr (%)	3 Yr (%)	5 Yr (%)	Std Dev	Sharpe	Sortino
Parag Parikh Flexi Cap Fund	20.64	22.96	22.80	8.72	0.48	1.08
Parag Parikh ELSS Tax Saver Fund	20.40	23.59	25.95	9.55	0.41	0.96
NIFTY 500 - TRI	17.18	19.41	17.19	12.82	0.23	0.47

#3 Parag Parikh Liquid Fund

This is an open-ended debt scheme incepted in May 2018 with a mandate to invest in liquid and money market instruments.

The primary investment objective of the scheme is to provide optimal returns with lower risk and higher liquidity through judicious investments in money market and debt instruments.

The investments are mainly in low-risk, short-term, money market assets that have a maturity of up to 91 days.

These include Treasury bills (T-bills), call money, repurchase agreements, short-term debt securities issued by the government, certificates of deposits (CDs), commercial papers (CPs), and term deposits.

It's suitable for investors worried about market volatility and who want to keep their money safe and liquid. It's not suitable for investors who desire high returns.

The AUM of Parag Parikh Liquid Fund as of July 2025 is over Rs 38 billion (bn).

The fund has consistently held a quality portfolio since its inception, has prioritised the safety of the invested principal and focused on liquidity. It has avoided unnecessary credit risk that could jeopardise the safety and liquidity of the portfolio.

As per the July 2025 portfolio, the fund has 18 debt securities in its portfolio, and among them, a majority are CDs (47.6%), CPs (23.8%), and T-bills (21.3%). The others are cash & cash equivalents (4.4%), corporate debt (2.6%), and AIF (0.3%).

A majority of the fund's assets (76.5%) are in the 1-3 months maturity bucket, the 1-month maturity bucket (17.5%), and about 1.3% is in the 3-6 months maturity bucket. Other assets comprise 4.7% of the fund's portfolio.

The rating profile reveals that a majority of the fund's assets are AAA & equivalent and sovereign-rated.

With this approach, over a 1-year period, the fund has delivered compounded annualised rolling returns of 6.9%, which is a tad lower than the Crisil Liquid Debt Index. This is because the fund stays away from taking undue credit risk.

Moreover, it exposes its investors to lower volatility than its peers.

The fund is for conservative investors who have a short investment horizon, typically between 30 to 180 days, where safety and liquidity are the main priorities over returns.

Performance of Parag Parikh Liquid Fund

	6 Months (%)	1 Yr (%)	2 Yr (%)	Std Dev	Sharpe	Sortino
Parag Parikh Liquid Fund	3.40	6.99	6.89	0.18	0.86	0.18
CRISIL Liquid Debt Index	3.48	7.21	7.18	0.18	1.09	0.23

Conclusion

The popularity of the schemes from Parag Parikh Mutual Fund is due to investors being rewarded well on a risk-adjusted basis.

But don't get carried away just by the historical performance of just one fund house.

As an investor, you need to consider your own personal risk appetite, investment objective, financial goals, and time horizon before selecting appropriate schemes.

Ensure you are diversifying your portfolio well with schemes from various fund houses, whereby the fund house concentration risk is reduced.

Be a thoughtful investor.

Happy investing.

#Table Note: Data as of 29 August 2025.
Returns are on a rolling basis and in %, calculated using the Direct Plan-Growth option.
Standard Deviation indicates Total Risk, and Sharpe Ratio measures the Risk-Adjusted Return.
They are calculated over a 3-year period for equity funds, assuming a risk-free rate of 6% p.a.
In Table 2, Standard Deviation indicates Total Risk, and Sharpe Ratio measures the Risk-Adjusted Return. They are calculated over 1 year for liquid funds, assuming a risk-free rate of 6% p.a.
Past performance is not an indicator of future returns. The securities quoted in the table are for illustration only and are not recommendatory.
Speak to your investment advisor for further assistance before investing.
Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully.

Disclaimer: This write up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Registration granted by SEBI, enlistment of IA with Exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.