In a communication to investors dated August 4, Rajeev Thakkar, Chief Investment Officer of Parag Parikh Financial Advisory Services (PPFAS), addressed concerns over the recent performance of its equity schemes, especially the Parag Parikh Flexi Cap Fund.
He noted that equity markets have been range‑bound for roughly two years, a normal phase in equity investing. Such periods are neither unusual nor unusually long or large in impact.
Thakkar explained that PPFAS funds can experience short‑term dips when the portfolio stocks fall in price. He added that the current underperformance is comparable to a past episode in 2007 when he managed a PMS with just over ₹100 crore.
He rebuked comparisons with bank fixed deposits, saying the volatility of equities is why they can deliver higher returns. He reminded investors that PPFAS had warned about high absolute return expectations during 2024’s exuberance and kept higher cash balances.
Thakkar said the market’s two‑year correction has created new buying opportunities. Cash in the Flexi Cap Fund has dropped from about 25 % to 14‑15 %, and he expects it to move to single digits as the fund buys more positions.
On artificial intelligence, the officer said PPFAS views the recent IT‑services sell‑off as an opportunity, not a threat. He noted that AI will replace some jobs but also create new ones, such as in cybersecurity.
Regarding private sector banks, Thakkar maintained a positive outlook for the four banks in PPFAS’s basket, saying the issues at HDFC Bank so far do not threaten its franchise or customers.
Finally, he warned against investing solely on market themes, stressing that PPFAS will keep buying attractive ideas, not chase fads.