Parag Parikh Flexi Cap Fund: Smart Investing Strategies

Parag Parikh Flexi Cap Fund is a mutual fund scheme from Ppfas Mutual Fund that aims to achieve long-term capital appreciation by investing primarily in equity and equity-related instruments. It is a flexi-cap fund, which means that the fund management team has the freedom to invest in companies of different sizes depending on where they expect maximum gains. This fund is best suited for investors who are looking for high returns and are ready for the possibility of moderate losses. The minimum SIP investment is ₹1,000.

How to buy Parag Parikh Flexi Cap Fund shares

Parag Parikh Flexi Cap Fund shares can be purchased directly from the website of the fund house, PPFAS Mutual Fund. Alternatively, you can buy shares through platforms like MF Central and MF Utility. If you are uncomfortable with buying shares online, you can seek help from a mutual fund distributor, such as a bank.

When investing in Parag Parikh Flexi Cap Fund, you must invest only through the SIP route. This is a flexi-cap fund, which means the fund management team has complete freedom to invest in companies of different sizes, depending on where it expects maximum gains. As a result, flexi-cap funds are most suitable for equity fund investors as the job of stock selection is left to the fund manager.

It is important to note that you should not invest in this fund if you need to redeem your investment in less than five years. Additionally, this fund has a very high risk level and has no lock-in period.

How to sell Parag Parikh Flexi Cap Fund shares

To sell Parag Parikh Flexi Cap Fund shares, follow these steps:

• Understand the Costs: Before selling your shares, be aware of the potential costs involved. If you sell your shares within a year of purchase, short-term capital gains tax will be applicable at a rate of 20%. If you sell after a year, long-term capital gains tax will apply, with a current rate of 12.5% on returns exceeding Rs 1.25 lakh in a financial year. Any cess or surcharge is not included in these rates.
• Timing: Consider the timing of your sale. Flexi-cap funds are designed for long-term investment, and you should ideally hold them for at least five years to beat inflation and fixed-income returns. Selling before this period may result in suboptimal returns or even losses.
• Redemption Process: You can redeem your investments in the Parag Parikh Flexi Cap Fund by contacting the fund house, PPFAS Mutual Fund. If you invested through a platform like MF Central or MF Utility, you may need to reach out to them for redemption. Alternatively, if you invested through a mutual fund distributor or your bank, you can seek their assistance in redeeming your shares.
• Exit Load: Note that the Parag Parikh Flexi Cap Fund has an exit load. For units above 10% of the investment, there is a 2% exit load if redeemed within 365 days and a 1% load if redeemed after 365 days but before 730 days. This is an additional cost to consider when deciding when to sell your shares.
• Proceeds: Once you have sold your shares, you will receive the proceeds from the sale. Ensure you have provided correct bank account details to receive the funds.
• Tax Implications: Remember that any gains from the sale of mutual fund shares are subject to capital gains tax, as mentioned earlier. Keep proper records of your transactions for tax purposes.

Tax implications of investing in Parag Parikh Flexi Cap Fund

Parag Parikh Flexi Cap Fund is a mutual fund scheme from PPFAS Mutual Fund. It is a flexi-cap fund, which means that the fund management team has the freedom to invest in companies of different sizes, depending on where they expect maximum gains. This fund has a very high risk according to SEBI's Riskometer.

When considering investing in the Parag Parikh Flexi Cap Fund, it is important to understand the tax implications, which can be summarised as follows:

Capital Gains Taxation:

• If the mutual fund units are sold after 1 year from the date of investment:
• Gains up to Rs 1.25 lakh in a financial year are exempt from tax.
• Gains over Rs 1.25 lakh are taxed at a rate of 12.5%.
• If the mutual fund units are sold within 1 year from the date of investment:
• The entire amount of gain is taxed at a rate of 20%.
• No tax is payable as long as you continue to hold the units.

Dividends:

Dividends are added to the income of the investors and taxed according to their respective tax slabs. If an investor's dividend income exceeds Rs. 5,000 in a financial year, the fund house also deducts a TDS (Tax Deducted at Source) of 10% before distributing the dividend.

Exit Load:

There is an exit load of 2% if units are redeemed within 365 days and 1% if redeemed after 365 days but on or before 730 days.

How to invest in Parag Parikh Flexi Cap Fund online

The Parag Parikh Flexi Cap Fund is a mutual fund scheme launched by PPFAS Mutual Fund in October 2012. The fund aims to achieve long-term capital appreciation by investing primarily in equity and equity-related instruments. It is a flexi-cap fund, which means the fund management team has complete freedom to invest in companies of different sizes, depending on where it expects maximum gains.

• Visit the PPFAS Mutual Fund website or platforms like MF Central and MF Utility.
• Sign up and create an account if you don't have one already.
• Provide the necessary personal and financial information required for the registration process.
• Choose the Parag Parikh Flexi Cap Fund from the list of available funds.
• Decide on the amount you want to invest. The minimum SIP investment for this fund is ₹1,000, and the minimum lumpsum investment is also ₹1,000.
• Select the investment option that suits you, such as a one-time investment or starting a Systematic Investment Plan (SIP).
• Provide your bank account details and payment information to proceed with the investment.
• Review your investment details and confirm the transaction.
• You will receive a confirmation of your investment, and your mutual fund units will be allocated based on the current Net Asset Value (NAV) of the fund.

Remember that the Parag Parikh Flexi Cap Fund is considered a Very High-Risk investment according to SEBI's Riskometer. It is recommended that you consult a financial advisor before making any investment decisions and read all the scheme-related documents carefully.

How to invest in Parag Parikh Flexi Cap Fund through SIP

Investing in the Parag Parikh Flexi Cap Fund through a Systematic Investment Plan (SIP) can be a good option for those seeking long-term capital appreciation by investing in equity and equity-related instruments. Here is a step-by-step guide on how to invest in this fund through SIP:

Step 1: Understanding the Fund

Before investing, it is essential to understand the nature of the Parag Parikh Flexi Cap Fund. This fund is a flexi-cap fund, which means the fund management team has the freedom to invest in companies of different market capitalizations (large-cap, mid-cap, and small-cap). The fund aims to achieve long-term capital appreciation and is suitable for investors with a high-risk appetite.

Step 2: Evaluating Risk and Returns

The Parag Parikh Flexi Cap Fund is considered a Very High-Risk investment according to SEBI's Riskometer. While it offers the potential for high returns, investors should be prepared for possible ups and downs in their investment value. The fund has delivered average annual returns of around 20% since its inception.

Step 3: Choosing a Platform

Investors can purchase the Parag Parikh Flexi Cap Fund - Direct Plan from the website of the fund house, PPFAS Mutual Fund. Alternatively, the fund can also be bought through platforms like MF Central and MF Utility. Various online platforms, such as ET Money, also offer the option to invest in this fund with a simple and paperless process.

Step 4: SIP Investment Process

When investing through SIP, investors commit to investing a fixed amount in the fund at regular intervals, typically monthly. Here are the general steps to set up an SIP:

• Decide on the amount you want to invest in each instalment. The minimum SIP investment amount for the Parag Parikh Flexi Cap Fund is ₹1,000.
• Choose the date on which you want to make the investments.
• Provide your bank account details from which the payments will be made.
• Set up the SIP through the platform of your choice, following their specific instructions.

Step 5: Monitoring and Redeeming

After setting up the SIP, investors should regularly monitor the performance of the fund. It is recommended to hold the investment for at least five years to beat inflation and fixed-income returns. However, investors should be aware of the exit load and capital gains tax implications when redeeming their investments. For example, the Parag Parikh Flexi Cap Fund has an exit load of 2% if redeemed within 365 days and 1% if redeemed after 365 days but before 730 days.

Frequently asked questions