Rs 5 lakh more gains hack: Rs 5,000 SIP turned into Rs 18 lakhs in Parag Parikh Flexi Cap Fund, but this outperformer would have turned the same SIP into Rs 23 lakhs!
One of the primary reasons investors flock to flexi-cap mutual funds is the flexibility in asset allocation.
Introduction:
Flexi-cap mutual funds have been gaining immense popularity among investors due to their unique flexibility in navigating the dynamic stock market. Unlike other categories such as Large-Cap, Mid-Cap, and multi-cap funds, flexi-cap funds have the freedom to invest across various market capitalizations, making them a versatile choice for investors. In this blog, we will delve into the advantages of flexi-cap funds and conduct a comparative analysis of two prominent players in the category: Parag Parikh Flexi Cap and Quant Flexi Cap Fund.
The Flexibility Advantage:
One of the primary reasons investors flock to flexi-cap mutual funds is the flexibility in asset allocation. According to SEBI's categorization, flexi-cap funds must invest a minimum of 65 per cent of assets in equity and equity-related instruments. This flexibility allows fund managers to adjust their allocations based on market conditions, a feature not available in other Hybrid Funds.
Parag Parikh Flexi Cap - A Renowned Player:
Parag Parikh Flexi Cap has become a stalwart in the flexi-cap category, boasting substantial assets under management (AUM) of Rs 50,000 crore. The fund's historical performance has been noteworthy, consistently outperforming benchmarks like the S&P 500 BSE TRI and Equity: Flexi Cap over a 10-year period.
Enter Quant Flexi Cap Fund - The Outperformer:
In this competitive landscape, Quant Flexi Cap Fund has emerged as a standout performer. The fund's AUM of Rs 2,901 crore may be smaller compared to Parag Parikh Flexi Cap, but its returns tell a compelling story.
Comparative Returns Analysis:
Let's examine a SIP investment of Rs 5000 per month for 10 years in both funds:
Quant Flexi Cap Fund: Total sum of Rs 23,11,938 with 25.45 per cent annualized returns.
Parag Parikh Flexi Cap Fund: Total sum of Rs 18,04,387 with 20.87 per cent annualized returns.
The significant difference of Rs 5,07,551 underscores the superior performance of Quant Flexi Cap Fund.
Detailed Fund Comparison:
|
Particulars
|
Quant Flexi Cap
|
Parag Parikh Flexi Cap
|
|
Fund Age
|
11 yrs 1 m
|
10 yrs 8 m
|
|
Fund Size Rs in Cr
|
2,901
|
52,007
|
|
Standard Deviation
|
17.73
|
11.32
|
|
Sharpe
|
1.64
|
1.56
|
|
Beta
|
1.05
|
0.66
|
|
Sortino
|
2.97
|
2.2
|
|
Alpha
|
12.26
|
7.17
|
|
P/E Ratio
|
19.79
|
19.95
|
|
P/B Ratio
|
2.18
|
3.48
|
|
Equity in %
|
95.85
|
84.83
|
|
Debt in %
|
4.09
|
14.12
|
|
Expense Ratio in %
|
0.77
|
0.6
|
|
Exit Load in %
|
1
|
2
|
Conclusion:
In conclusion, while Quant Flexi Cap Fund has shown superior returns, the decision to invest should consider individual preferences and risk tolerance. Investors prioritizing lower volatility may lean towards Parag Parikh Flexi Cap Fund, while those emphasizing higher returns and lower exit loads might find Quant Flexi Cap Fund more attractive. It's crucial to align investment decisions with personal financial goals and risk appetite, taking into account the comprehensive set of metrics presented.