PPFAS Mutual Fund has announced a slight increase in the Base Expense Ratio (BER) for its flagship Parag Parikh Flexi Cap Fund, effective August 25, 2026. This adjustment comes as the fund reveals a strategic portfolio shift over the last six months, notably raising its exposure to the IT-Software sector.
BER Adjustment Details
The BER for the Direct Plan of the Parag Parikh Flexi Cap Fund will rise from 0.52% to 0.53%. For the Regular Plan, the BER will increase from 1.04% to 1.05%. The fund cited Regulation 66(7) of the SEBI (Mutual Funds) Regulations, 2026, as the basis for this change. The BER represents recurring costs controlled by the Asset Management Company (AMC) for managing and operating the scheme, excluding statutory levies, brokerage, and transaction costs.
Significant Portfolio Reallocation
Between February and July 2026, the Parag Parikh Flexi Cap Fund demonstrated a disciplined investment approach with relatively low portfolio churn, maintaining around 40 holdings. Despite this stability, a notable shift occurred in its sectoral allocation:
- IT-Software Dominates Additions: The fund's weight in the IT-Software industry surged from 6.9% to 10.3%, marking a 3.4 percentage point increase. HCL Technologies emerged as the largest weight gainer among individual stocks, contributing significantly to this growth.
- Power Sector Reduced: Conversely, the Power sector saw the sharpest reduction, with its allocation decreasing from 6.9% to 6.0%. Power Grid Corporation was identified as the biggest weight loser.
- Equity Allocation Rise: Overall equity allocation within the fund's portfolio increased from 76% in February to 81% by May, holding steady through July.
Other minor adjustments included a 0.7 percentage point gain in Diversified FMCG and a 0.1 percentage point increase in Pharmaceuticals & Biotechnology. Banks remained the largest industry exposure, consistently around 20% in July, with HDFC Bank being the largest individual holding at 7.5%.
Fund Performance Overview
As of July 31, 2026, the Parag Parikh Flexi Cap Fund managed assets exceeding ₹1.48 lakh crore. While the fund lagged the Nifty 500 TRI benchmark over shorter periods (three, six, and twelve months), it has shown stronger performance over the long term. It delivered positive alpha over two, three, four, and five years. Its five-year Compound Annual Growth Rate (CAGR) stood at 13.4%, outperforming the Nifty 500 TRI's 12.1% over the same period.