Parag Parikh Flexicap Fund Resists Pressure from Cash Calls Amid Sector-Wide Split
Equity Mutual Fund Inflows Cool, Flexicap Funds Remain Popular
Equity fund inflows in India cooled down in April, slipping by around 5 percent to Rs 38,440 crore from Rs 40,450 crore in March, according to data released by the Association of Mutual Funds in India (AMFI). Despite the decline, flexicap funds remained the most popular equity mutual fund category, pulling in Rs 10,147.85 crore in the second straight month of strong inflows.
Among the top flexicap funds, Parag Parikh Flexi Cap Fund stands out for holding a significantly higher cash level compared to its peers. However, the cash level is slowly decreasing, dropping to 15.10 percent in April from 18.5 percent in March and 25 percent earlier. The fund is gradually putting more money to work while maintaining a dry powder reserve.
The top holdings in Parag Parikh Flexi Cap Fund include HDFC Bank, which remains the largest holding at 7.94 percent, followed by Power Grid at 6.99 percent, Coal India at 5.95 percent, ITC at 5.43 percent, and ICICI Bank at 4.92 percent. Together, the top five stocks make up a little over 31 percent of the portfolio, indicating that the fund is still focused despite owning around 40 stocks in total.
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In contrast, HDFC Flexi Cap Fund, the second-biggest gainer in terms of inflows, has a low cash level of 4.39 percent in April, slightly higher than 3.96 percent in March. The fund is heavily invested in financial stocks, with ICICI Bank as the top holding at 8.69 percent, followed by Axis Bank at 6.83 percent and HDFC Bank at 6.81 percent.
| Fund | Cash Level (March) | Cash Level (April) |
|---|---|---|
| Parag Parikh Flexi Cap Fund | 18.5% | 15.10% |
| HDFC Flexi Cap Fund | 3.96% | 4.39% |
| ICICI Prudential Flexicap Fund | 3.67% | 3.8% |
ICICI Prudential Flexicap Fund also has a low cash level of 3.8 percent in April, slightly higher than 3.67 percent in March. The fund's portfolio is more diversified than HDFC Flexi Cap, with TVS Motor as the top holding at 8.87 percent, followed by ICICI Bank at 6.48 percent and Maruti Suzuki at 6.23 percent.
| Fund | Top Holding (April) | Cash Level (April) |
|---|---|---|
| HDFC Flexi Cap Fund | ICICI Bank (8.69%) | 4.39% |
| ICICI Prudential Flexicap Fund | TVS Motor (8.87%) | 3.8% |
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Overall, the three funds offer a divergent picture of their investment strategies, with Parag Parikh Flexi Cap Fund focusing on a mix of cash and stocks, HDFC Flexi Cap Fund heavily invested in financial stocks, and ICICI Prudential Flexicap Fund maintaining a balanced portfolio.
Investor Takeaway
Investors should note that Parag Parikh Flexicap Fund is slowly reducing its cash holdings and putting more money to work.
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