PGIM India Flexi Cap Fund: A Balanced Contender in the Market?

PGIM India Flexi Cap Fund

The PGIM India Flexi Cap Fund, previously known as the PGIM Diversified Equity Fund, has been navigating the Indian markets since 2015. As a flexi-cap fund, it boasts the freedom to invest across large, mid, and small-cap companies, seeking growth opportunities. But with this flexibility comes inherent risks. Let’s delve into the fund’s performance, analyze its strengths and weaknesses, and assess its suitability for your investment goals.

Past Performance:

  • Returns: The fund has delivered a CAGR of 12.24% since inception (as of Jan 31, 2024), outperforming its benchmark, the Nifty 500 TRI, which delivered 11.03% CAGR during the same period.
  • Volatility: The fund’s standard deviation stands at 18.27%, indicating moderate volatility compared to the category average of 19.31%. This suggests it has managed to balance risk and reward to a certain extent.
  • Sharp Ratio: The fund’s sharp ratio of 0.67 sits above the category average of 0.62, indicating it has generated better returns per unit of risk compared to its peers.

Strengths:

  • Experienced Fund Management: The fund is managed by Mr. Sanjay Parekh, a seasoned professional with over 20 years of experience.
  • Diversified Portfolio: The fund’s multi-cap approach mitigates concentration risk and allows it to capture growth across market segments.
  • Reasonable Expense Ratio: The expense ratio of 0.38% is lower than the category average, potentially enhancing returns for investors.

Weaknesses:

  • Below-average Alpha: While the fund has outperformed the benchmark, its alpha (excess return over benchmark) of 0.42% is lower than the category average of 0.71%.
  • Inconsistent Track Record: The fund’s performance has been inconsistent over shorter timeframes, with periods of underperformance.
  • Flexi-cap Risk: The inherent volatility of flexi-cap funds can be unsuitable for risk-averse investors.

Predicting Future Performance:

While past performance is a valuable indicator, it’s crucial to remember that it doesn’t guarantee future results. Market conditions, investment strategies, and economic factors can all significantly impact a fund’s performance. Therefore, relying solely on past data to predict future returns is not advisable.

Key Considerations:

Before investing in the PGIM India Flexi Cap Fund, consider your risk tolerance, investment horizon, and financial goals. This fund might be suitable for investors with a moderate risk appetite and a long-term investment horizon (5+ years) who are comfortable with potential volatility. However, if you prioritize capital preservation or have a shorter investment timeframe, this fund might not be the best fit.

Is it good to invest in the PGIM India Flexi Cap Fund?

Pros:

  • Potential for high returns: Flexi-cap funds offer the potential for higher returns than other equity funds due to their ability to invest across market capitalizations.
  • Experienced fund manager: The fund is managed by Sanjay Parekh, who has over 20 years of experience in the Indian market.
  • Diversified portfolio: The fund’s multi-cap approach helps to mitigate concentration risk.
  • Reasonable expense ratio: The expense ratio is lower than the category average.

Cons:

  • Higher risk: Flexi-cap funds are inherently more volatile than other equity funds, meaning your investment could experience larger losses.
  • Inconsistent track record: The fund’s performance has been inconsistent over shorter timeframes.
  • Not suitable for all investors: This fund may not be suitable for investors with a low risk tolerance or a short investment horizon.

What is the return of the PGIM India Flexi cap fund for 5 years?

The 5-year return of the PGIM India Flexi Cap Fund depends on which plan you’re interested in, as returns can vary slightly between the Direct and Regular plans due to expense ratio differences. Here’s the information for both:

PGIM India Flexi Cap Fund – Direct Plan (Growth Option):

  • 5-year CAGR: 21.34% (as of December 31, 2023)
  • 5-year absolute return: Approximately 172.37% (considering a hypothetical investment of ₹10,000 on launch)

PGIM India Flexi Cap Fund – Regular Plan (Growth Option):

  • 5-year CAGR: 19.23% (as of December 31, 2023)
  • 5-year absolute return: Approximately 154.67% (considering a hypothetical investment of ₹10,000 on launch)

Please keep in mind that past performance is not necessarily indicative of future results. It’s important to remember that the stock market is inherently volatile, and returns can fluctuate significantly over time.

Before making any investment decisions, be sure to conduct your own research and consider your individual circumstances, risk tolerance, and investment goals.

What is the size of the PGIM Flexi Cap fund?

The size of the PGIM India Flexi Cap Fund is measured by its Assets Under Management (AUM). As of December 31, 2023, the fund had an AUM of ₹6,092.23 Crore. This translates to roughly $7.6 Billion USD.

It’s important to note that this information is based on the latest readily available data (December 31, 2023). The fund’s AUM can fluctuate day-to-day based on investor activity.

Here are some additional details about the fund size:

  • Classification: Medium-sized fund within the Flexi Cap category.
  • Direct Plan AUM: ₹6,092.23 Crore
  • Regular Plan AUM: ₹6,092.23 Crore (both plans share the same underlying portfolio)

What is the holding of the PGIM Flexi Cap fund?

As of December 31, 2023, the PGIM India Flexi Cap Fund held 61 different stocks across various sectors. While I cannot list all the holdings here, I can share some key information and resources to help you delve deeper:

Top 10 Holdings (as of December 31, 2023):

  1. ICICI Bank Ltd.
  2. HDFC Bank Ltd.
  3. Reliance Industries Ltd.
  4. LTIMindtree Ltd.
  5. Varun Beverages Ltd.
  6. Max Healthcare Institute Ltd.
  7. Bajaj Finance Ltd.
  8. Avenue Supermarts Ltd.
  9. Hindustan Unilever Ltd.
  10. Axis Bank Ltd.

Sector Allocation:

  • Financial Services: 44.81%
  • Consumer Discretionary: 15.74%
  • Healthcare: 8.05%
  • Information Technology: 7.21%
  • Energy: 6.58%
  • Others: 17.61%

What is the fund size of the Parag Parikh Flexi Cap Fund?

As of February 2, 2024, the Parag Parikh Flexi Cap Fund has an AUM (Assets Under Management) of ₹52,007 Crore. This translates to roughly $6.3 billion USD.

Here are some additional details about the fund size:

  • Classification: Medium-sized fund within the Flexi Cap category.
  • Direct Plan AUM: ₹52,007 Crore
  • Regular Plan AUM: ₹52,007 Crore (both plans share the same underlying portfolio)

It’s important to note that the AUM of a fund can fluctuate day-to-day based on investor activity, so this information might not be entirely up-to-date by the time you read it. However, it provides a good estimate of the fund’s overall size.

For the latest AUM information, you can refer to the following resources:

What is the asset allocation of the PGIM Flexi cap fund?

As of December 31, 2023, the PGIM India Flexi Cap Fund’s asset allocation was as follows:

Equity: 97.97%

  • Large Cap: 45% – 70% (flexible allocation)
  • Mid Cap: 15% – 35% (flexible allocation)
  • Small Cap: 5% – 20% (flexible allocation)
  • Sector Distribution:
    • Financial Services: 44.81%
    • Consumer Discretionary: 15.74%
    • Healthcare: 8.05%
    • Information Technology: 7.21%
    • Energy: 6.58%
    • Others: 17.61%

Debt & Cash: 2.03%

  • Debt: 0.18%
  • Cash & Cash Equivalents: 1.85%

Key Points:

  • The fund predominantly invests in equities (97.97%), with the flexibility to adjust allocations across market capitalizations (large, mid, and small cap) based on the fund manager’s outlook.
  • The current allocation leans towards large cap (45% – 70%), followed by mid cap (15% – 35%) and small cap (5% – 20%).
  • The largest sectoral exposure is towards Financial Services (44.81%), followed by Consumer Discretionary (15.74%).
  • The fund maintains a small allocation to debt and cash (2.03%) for liquidity and risk management purposes.

Please note:

  • Asset allocation is subject to change based on market conditions and the fund manager’s investment decisions.
  • The information provided is based on the latest available data as of December 31, 2023.

For the most up-to-date information on the PGIM India Flexi Cap Fund’s asset allocation, you can refer to the following resources:

Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor before making any investment decisions.