Parag Parikh Long Term Equity Fund recategorized as Parag Parikh Flexi cap fund

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Parag Parikh Long Term Equity Fund has been renamed as a Flexi cap fund. Parag Parikh Flexi cap fund is the new name of the scheme. According to the new name recommendation, the scheme would be a Flexi cap fund that has the opportunity to invest across large-cap, mid-cap, and small-cap schemes.

 Neil Parag Parikh, Chairman, and CEO, PPFAS Mutual Fund said that as in keeping with laws and after all the essential approvals, the required amendments would be effective in their flagship scheme. But there is no change in their investment process portfolio. They will continue with their ways to manage the fund as earlier. A Flexi cap strategy would permit the fund manager to invest wherever opportunities and value are given without limitations. In September, the new changes were necessitated after SEBI changed the investment regulations of multi-cap schemes. According to the new regulations of the SEBI multi-cap schemes should invest at least 25% each in large-cap, mid-cap, and small cap schemes. Earlier, the multi-cap schemes had the opportunity to invest across market capitalizations and sectors based on the viewpoint of the fund manager.

 Most of the investment experts and mutual fund managers believed that the new SEBI regulations would change the risk of the multi-cap schemes and they would not be available for moderate equity investors anymore. They note that a 50% minimum investment requirement in mid-cap and small-cap stocks would make them into the extremely risky group.

Fund house was contemplating reclassifying their schemes into one of the existing groups like value, ESG, focused, and so on, when SEBI recategorized and announces a new category known as Flexi cap which would be an apt group for the before multi-cap schemes. In the last month, many big fund houses were already reclassified their multi-cap schemes. In the coming days along with Parag Parikh Long Term Equity Fund taking the initial step, many other multi-cap schemes are likely to launch their reclassification of the multi-cap schemes. Asset management companies should ensure a flexible benchmark for the Flexi-Cap Fund. MF investors having a flexible option to owning corporate or their property in it without any restrictions in terms of allocation to a specific market cap could consider the scheme.

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