Parag Parikh Flexi Cap Regular Growth INF879O01019

Parag Parikh Flexi Cap Fund earns an Above Average Process Pillar rating.

The most meaningful contributor to the rating is the fund's excellent long-term risk-adjusted performance. This can be seen in its ten-year alpha calculated relative to the category average, which suggests that the managers have shown skill in their allocation of risk. The firm's five-year retention rate of 100% also strengthens the process. However, the process is limited by the size of its portfolio management team, with five portfolio managers.

This strategy skews toward larger, deeper value companies than its average peer in the Flexi Cap Morningstar Category. Looking at additional factor exposure, this strategy has consistently favored high-quality stocks, including those with low financial leverage and solid returns on equity, compared with Morningstar Category peers during recent years. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it weather downturns better than Morningstar Category peers. In recent months, the strategy was more exposed to the Quality factor compared with its Morningstar Category peers as well. The managers have also tended to overweight yield during recent years, shown by the portfolio's high exposure to dividends or buybacks. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts stock performance. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. This orientation tends to pay off most prominently when markets are hot. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in financial services and utilities relative to the category average by 7.1 and 5.6 percentage points, respectively. The sectors with low exposure compared with category peers are industrials and basic materials, underweight the average by 11.5 and 7.4 percentage points of assets, respectively. The portfolio is composed of 141 holdings and is relatively top-heavy. Of the strategy's assets, 51.0% are concentrated within the top 10 holdings, compared to the typical peer's 39.9%.