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New Delhi: Flexi-cap mutual funds have emerged as one of the most trusted equity categories for long-term investors. In these funds, fund managers have the freedom to invest in large-cap, mid-cap and small-cap stocks without any strict allocation limit. This allows managers to adjust the portfolio according to market conditions, valuations and opportunities. This flexibility proves useful especially in the volatile market.
This is the reason why flexi-cap funds have attracted the attention of investors in the last few years. In this report, two major flexi-cap schemes of the country have been mentioned. The first one is Parag Parikh Flexi Cap Fund and the second one is HDFC Flexi Cap Fund. This gives an accurate assessment of consistent performance in the period of 3 years, 5 years and 10 years.
Talking about the period of 3 years to 10 years, Parag Parikh is ahead in the short-to-medium (3 years) and long term (10 years), whereas HDFC dominated in the 5-year period.
3 years: In the period of 3 years, Parag Parikh Flexi Cap Fund is ahead. It has given a return of 22.69%, while HDFC Flexi Cap Fund is slightly behind at 22.52%.
5 years: HDFC Flexi Cap Fund has given higher returns than Parag Parikh in the 5-year category. It has given a return of 25.47% whereas Parag Parikh's return was 21.45%.
10 years: Parag Parikh gave a return of 18.38% in 10 years, whereas HDFC's return was 17.56%.
If an investor investing Lump Sum had invested Rs 1 lakh in Parag Parikh Flexi-Cap Fund, then a fund of Rs 5.40 lakh would have been created. At the same time, if the same amount had been invested in HDFC Flexi Cap, it would have been Rs 5,04,000. In the long term, Parag Parikh Flexi Cap has given better returns than HDFC Flexi Cap.
SIP gives you the option of regular investment. You can invest every month as per your convenience. This is completely different from Lump Sum investing.
3 year SIP: HDFC Flexi Cap has given a return of 21.15%, while Parag Parikh's return has been 18.80%.
5 year SIP: In the last 5 years, HDFC has given a return of 21.47%, while Parag Parikh has given a return of 18.96%. That means HDFC is better than Parag Parikh Flexi Cap in a period of 5 years.
10-year SIP: Parag Parikh Flexi Cap has given a return of 20.32% on 10-year SIP, while HDFC's return is slightly lower, which is equal to 19.85%.
That means HDFC gave better SIP returns in the short and medium term. If an investor had started a SIP of Rs 5000 in Parag Parikh Flexi Cap earlier in 10 years, today the beneficiary would be eligible to get around Rs 17.30 lakh. At the same time, if this amount was deposited in HDFC Flexi Cap Fund, its fund would have been Rs 16.80 lakh.
Note — Returns given here are on annual basis.
Managed by PPFAS Mutual Fund, this fund was launched on 24th May 2013 and is known for its valuation-conscious investments.
This scheme of HDFC Mutual Fund was launched on 01 January 2013 and is one of the biggest schemes in the category.
The returns in mutual funds depend on which category the investor invested the money in and how long it held it. Investment in small cap, large cap or mid-cap is done according to the fixed category, irrespective of the market mood. But Flexi-Cap gives the fund manager the freedom to adjust investments according to the market reaction. That's why choosing the right flexi-cap fund is extremely important. Parag Parikh and HDFC are both top performers, but choose according to your risk profile, investment tenor and market outlook. Both are reliable for the long term, but performance can change across market cycles.
(Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, gold, silver and crypto assets.)
