Parag Parikh Long Term Equity Fund: Fund Review
Last updated on January 28th, 2019
Parag Parikh Long Term Equity Fund is diversified equity fund. It is a local fund with a global focus. This is one of only a handful of Indian mutual fund schemes to invest in a basket of Indian and foreign stocks. The fund gave 16.32% return since its inception in May 2013. The fund managers are Rajeev Thakkar, Raunak Onkar, and Raj Mehta. Rajeev Thakkar manages the domestic portion of the scheme, while Raunak Onkar manages the foreign investment component. Raj Mehta is responsible for the ‘fixed income’ investment component. This fund gives the fund managers flexibility to invest in the companies of their likings irrespective of the size of the company and can, therefore, generate much higher returns. Invest in this fund for an investment horizon of at least 5 years for the investments to give best results.
Parag Parikh Long Term Equity Fund is ranked 5th in its category by Upwardly. The fund has managed to beat its benchmark majority of the times since its inception. The funds trailing returns both 1 and 3-year are higher than its benchmark.
Source: Value Research
Parag Parikh Long Term Equity Fund has beaten its category average by 1 percentage points and its benchmark by 3 percentage points in the 5-year returns. The fund is in line with its peers in its performance in the 5-year returns.
|Fund||1 Year Return (%)||3 Year Return (%)||5 Year Return (%)|
|Parag Parikh Long Term Equity Fund||-2.11%||13.98%||16.53%|
|Mirae Asset India Equity Fund||-3.19%||17.74%||18.70%|
|Kotak Standard Multicap Fund||-2.66%||16.60%||18.68%|
|ICICI Prudential Multicap Fund||-2.74%||14.90%||16.83%|
|UTI Equity Fund||0.15%||13.97%||14.87%|
A SIP investment of Rs 5,000 a month in Parag Parikh Long Term Equity Fund started 5 years ago is worth Rs 4.07 lakhs now. A profit of Rs 1.02 lakhs in just 5 years. Even if one chose to redeem their investment then they would be liable to pay tax only on the excess returns on Rs 1 Lakh. Since gains up to Rs 1 lakh are exempt from taxes.
Source: Value Research
Parag Parikh Long Term Equity Fund invests in Indian equities, foreign equities and related instruments and debt securities. Its investment universe is not restricted by any self-imposed limitations in terms of sector, market capitalization, geography, etc. However, an average of 65% of its corpus is invested in listed Indian equities. This is to benefit from the favorable Capital Gains tax treatment accorded to such schemes. Also, the fund buys securities at a discount to intrinsic value this will help to create value for investors. The investment philosophy is to invest in such value stocks.
The Fund Managers follow an active investment strategy primarily based on fundamental research. The fund follows a bottom-up stock selection approach. They attempt to profit from various cognitive and emotional biases displayed by companies and market participants. In other words, along with the dissection of financial statements, there will also be an overlay of the study of human emotions.
The fund has a well-diversified portfolio with 25 stocks in its portfolio. The top five holding sectors constitute 67% of the portfolio. These include Technology (22.67%), Financial (20.40%), Automobile (11.98%), FMCG (6.51%), and Healthcare (5.76%).
Investments in Parag Parikh Long Term Equity Fund should be made with a long term perspective. Invest in this fund to build wealth for the long term. Securities are bought at a discount to the intrinsic value which will help create value for investors. The fund accepts both lump sum and SIP investments. Invest in this fund for an investment horizon of at least 5 years to give the best results. Do not invest in the fund for short-term as returns can be manipulative.
|Fund Name||L&T Emerging Business Fund|
|Launch Date||May 24th, 2013|
|AUM||Rs 1453 Cr|
|Return (Returns greater than 1 year are annualized)||Since Launch: 16.32%
1 Year: -2.11%
3 Year: 13.98%
5 Year: 16.53%
|Fund Category Risk||High|
|Minimum Investment Horizon||5+ years|
|Minimum Investment||Rs 1,000|
|Minimum Additional Investment||Rs 1,000|
|Exit Load||2% if withdrawn within 1 year
1% if withdrawn between 365 and 730 Day(s)
|Fund Manager||Rajeev Thakkar