Investing in the stock markets is always risky, but the rewards are high, too. Investing in equity is an excellent option to make your money grow faster, but only if you are ready to accept the risk of losing money for a brief period or longer. Although there are ways to recover losses, there is no certainty about it. At the other end are the rewards from equities, which are lucrative but without guarantee. Investing in Mutual Funds is the best way to enter the stock market by hedging the accompanying risks and uncertainty. Although Mutual Funds do not mean guaranteed returns, they eliminate the chances of losing money while maintaining decent returns much above the prevailing interest rates banks offer. Parag Parikh Flexi Cap Fund, an equity-focused mutual fund, can be a safe bet for investors.
Features of Parag Parikh Flexi Cap Fund
Like all other flexi-cap funds launched by following the SEBI (Securities and Exchange Board) guidelines, the Parag Parikh fund belongs to the category of equity-focused fund. As mandated by SEBI, 65% of the fund’s total assets are for investing in equity and equity-related instruments. Thereby it allows investors to invest their money in stock markets but indirectly. The fund manager can allocate 35% of assets to other instruments, including the debt market. The pattern of allocation of assets is quite reassuring for investors as it mitigates the risk of high and direct exposure to the stock market. The fund manager spreads the investments across a range of equities to avoid the pitfalls of putting all eggs in one basket.
Mutual funds are of two types – one type is known as the Regular Growth Fund, and the other type is the Direct Growth Fund.
Mutual Fund – Regular Growth
Investors can benefit from the advice of experienced Mutual Fund advisors with a good understanding of stock markets and mutual funds. Investing through agents representing various Fund Houses is a safe way to invest in Mutual funds. The agents can help investors choose Mutual Funds that align with their investment goals and assist in achieving faster growth. Investors who prefer investing in Mutual Funds through SEBI-recognized advisors, brokers, or agents get access to Parag Parikh flexi cap fund regular growth that entails a higher expense ratio than Parag Parikh flexi cap fund direct growth.
Mutual Fund – Direct Growth
Experienced investors with ample knowledge about the financial markets, especially mutual funds, can opt to invest in Parag Parikh flexi cap fund direct growth. As the name implies, the fund allows investors to invest directly without involving any broker or agent. Avoiding the involvement of a third party when investing in Mutual Funds means that the expenses are less. These funds have a lower expense ratio than regular growth funds. Investors who track Parag Parikh flexi cap fund NAV regularly and take an interest in learning about investing on their own are the ones who prefer direct growth mutual funds.
Advantages of Investing in Flexi Cap Mutual Funds
Fund managers of flexi cap mutual funds always look to maximize returns by dynamically adjusting the portfolio’s asset allocation based on the investment objectives and market outlook. For example, suppose the fund manager detects the overvaluation of large-cap stocks. In that case, they can consider reducing the allocation in large-cap stocks while increasing the allocation in small-cap and mid-cap stocks. The adaptability of flexi-cap funds is hugely beneficial for investors as it allows them to seize growth opportunities across the market to provide risk-adjusted returns.
Another benefit of investing in flexi-cap funds is that it eliminates the need to make precise decisions about market capitalization. Investments of flexi-cap funds are spread across companies of various sizes, eliminating the need to choose specific market segments.
The diversification strategy lends stability to the overall portfolio by reducing risks about individual market segments.
Parag Parikh Flexi Cap Fund is ideal for meeting long-term investment objectives risk-free by navigating the market cycles to ensure risk-adjusted returns better than those from rigid investing strategies.
