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Summary: Parag Parikh Financial Advisory Services (PPFAS) rarely makes big moves, which is why even small ones are worth noticing. Last month, it quietly added to five of its holdings. Could these be clues to its next big winners?
Parag Parikh Financial Advisory Services (PPFAS) has built a reputation as one of India’s most distinctive fund houses. While most fund houses rush to launch new schemes at every market opportunity, PPFAS has preferred the slow, steady route. In its 12-year history, it has launched just six mutual funds, a rarity in today’s cluttered mutual fund landscape.
And yet, it has been a trendsetter. Its flagship Parag Parikh Flexi Cap Fund was one of the first in India to invest heavily in US equities. At one point, in 2020, nearly a third of its assets were parked in global giants like Alphabet, Amazon and Meta. That exposure has been scaled down in recent years due to regulatory limits, but it continues to differentiate the fund from its peers.
The slow-and-steady philosophy
PPFAS’ Chief Investment Officer, Rajeev Thakkar, epitomises the fund house’s patient approach. While most fund managers churn portfolios to keep up with the latest market trend, PPFAS sticks to its convictions.
In fact, when asked last year why its blue-ribbon flexi-cap fund was underperforming peers, Thakkar calmly told us: “There will be periods when we underperform, and we have communicated this to our unitholders. Currently, I am actually happy to underperform.”
This willingness to endure short-term pain for long-term gain has made the fund a favourite among investors seeking consistency over hype. The fund house even symbolises this with its mascot “Professor Tortoise,” representing patience, wisdom and longevity.
Five relatively big buys in August
Given this deliberate “buy-and-hold” style, every portfolio change at PPFAS deserves a closer look. In August, the fund house marginally increased its holdings in five companies:
- CCL Products: Stake rose from 0.20 per cent to 0.49 per cent, signalling growing confidence in this coffee and food ingredients company.
- E.I.D. - Parry (India): Exposure went up from 2.13 per cent to 2.40 per cent, making this sugar and nutraceutical player one of its larger bets.
- Dr Reddy’s Laboratories: Stake increased by 0.11 per cent, reinforcing its conviction in this pharma major.
- Axis Bank: Holding inched up by 0.09 per cent; noteworthy as PPFAS has held Axis Bank since its fund’s inception.
- Kotak Mahindra Bank: Stake moved up by 0.08 per cent, continuing its steady accumulation of high-quality banking franchises.
While Dr Reddy’s, Axis and Kotak Mahindra percentage changes may look small, remember that these are large-cap companies where even a 10-20 basis point increase represents significant capital being deployed.
Furthermore, these moves fit perfectly with PPFAS’ style. No dramatic portfolio churn, just incremental additions to businesses it already understands well. This is also consistent with its long history of staying invested in a select group of companies for many years.
For instance, the fund has been holding Axis Bank and ICRA since its launch and ICICI Bank since mid-2014, which is a testament to its buy-and-hold approach.
To sum up, the key takeaway is that Parag Parikh Mutual Fund’s measured approach continues to work quietly in the background. Rather than chasing every market fad, it keeps strengthening its conviction in businesses it trusts, a style that has created wealth for patient investors over time.
Interestingly, this long-term, behaviour-aware style is very much in sync with Value Research’s own philosophy. Our CEO, Dhirendra Kumar, has often emphasised that successful investing is less about chasing the latest hot tip and more about mastering your own behaviour. The biggest risks to wealth creation often come not from the markets, but from investors’ own reactions to them.
Dhirendra has captured these insights in his book, Money, Markets & Mistakes. Organised by theme, the book explores:
- Investor psychology and behavioural economics: Why we make emotional mistakes and how to avoid them.
- Investment fundamentals: The principles that stand the test of time, regardless of market cycles.
- Mutual fund strategy and market trends: How to separate noise from signal and stay disciplined.
Also read: Has Parag Parikh Flexi Cap Fund ever let its investors down?
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