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PPFAS Mutual Fund

Due to its cost-effective, inherent tax benefits and low-risk nature, mutual funds have become quite a popular avenue for most investors. It has gained momentum in the past few decades and has resulted in wealth creation for satisfied investors.

The Parag Parikh Financial Advisory Service is the new-age Wall Street for the Indian market. One of its most famous subsidiaries is the PPFAS Asset Management Private Ltd. This is an asset manager for the PPFAS mutual funds.

PPFAS is known for its substantial value investing structure. Their investments are based on the growth potential of each company, rather than the generic macro-economic environment. PPFAS AMC believes in long-term growth, and that’s why they reduce the market risks of short term investments.

The PPFAS AMC is a legal construct that is registered as a trust under the Indian Trust Act, 1882. It is registered with SEBI with a vide registration code MF/069/12. PPFAS AMC has undoubtedly proven to be nothing but profitable to its investors. By the end of 2018, PPFAS AMC had a total income of Rs. 1773.76 Lakhs (while being taxed for Rs. 565.78 Lakhs). PPFAS AMC, at the moment, offers about three schemes and has an asset under management of INR Rs. 2116.02 Crore (Jun-30-2019).

Hence, PPFAS is one such mutual fund that is definitely worth looking at. Let's look at some of the key features that it offers its investors.

Overview of PPFAS Mutual Fund

PPFAS AMC is a rather unique fund and firm believer of the “Law of the Farm.” This law is related to farming. It states that a farmer can only yield fruitful produce at a slow pace while practising with effort and discipline of consistency. The company operated on this law and hence is doing very well in the market.

The PPFAS AMC has a different approach to asset management than its competitors.

For example, the AMC only offers one equity scheme one liquid scheme and one tax saver scheme, believing that people can invest in different areas through one single product. This unique scheme process clears out confusion amongst clients on which fund to invest in. Another critical feature of PPFAS AMC is that they do not have a sales team. The company does not believe in subscribing to attract investors through constant promotions of their products. PPFAS AMC has a small group of relationship managers who work to establish a durable and long-lasting relationship with their clients.

They have a strong team that always seems concerned about the client's investments as much as the client. They are always ready to clear doubts the client, while maintaining a professional relationship, once the customer makes the purchase. The company also prides itself on its investment management team that deals with asset management in an ideal way in the market. PPFAS does not refer to common factors like algorithms, technical analysis, and momentum to curate a portfolio; instead, they use old school factors like low debt, cash flow, etc. PPFAS does not aim to attract investors that look for fund managers who have a stoic approach to the market. Lastly, the AMC mutual fund refrains from accepting one-time investments when the market is volatile. They believe that investing during such time may earn high profits, but it can also go sideways and give a considerable loss.

PPFAS AMC always focuses on making the interest of clients similar to those of their employees and management. Hence, their workforce invests a reasonable amount of their investible surplus in the company’s equity fund.

Investment Objective of PPFAS Mutual Fund

The overall goal and objective of the PPFAS AMC scheme is to generate long-term capital growth from an actively managed portfolio, which primarily consists of equity or equity-related securities. But the plans are mostly invested in Indian equities and some foreign equities. These are related instruments for debt securities.

PPFAS AMC has a unique investment philosophy to invest in value stocks, and to focus on purchasing securities at a discounted rate at an essential value will prove to create some value for the investors too. So, their long term investments refer to meeting a horizon of at least five years or more.

One of the primary goals of PPFAS AMC mutual fund is to get investments that are made for a long term perspective. The overall investment objective of their scheme is to generate long-term capital growth. The strategy dictates the fund managers to actively get investments and prioritize them based on primary fundamental research, which follows the bottom-up stock selection research.

These investments require a strict discipline risk management process. AMC incorporates a safe and secure method that seeks control over any significant risks in the portfolio construction procedure. This approach includes reasonable diversification of every portfolio by spreading the investments over a decent range of diverse industries, sectors, and market capitalizations.

Statistics of PPFAS Mutual Fund

Parag Parikh Long Term Equity Fund

ParticularsThis SchemeCategory
No. of Stocks2942.91
Top 5 Stock Weight37.94%30.28%
Top 10 Stock Weight62.15%48.21%
Top 3 Sector Weight57.4%39.67%
Average mcap (Cr)50085.59128789.08
Holdings in large cap stocks32.26% (10)54.07%
Holdings in mid cap stocks10.63% (6)19.08%
Holdings in small cap stocks12.91% (6)15.09%

Parag Parikh Liquid Fund

Security Type% WeightCategory Average
GOI2942.91
BRDS37.94%30.28%
CD62.15%48.21%
T-Bills57.4%39.67%
NCD & Bonds50085.59128789.08
CP32.26% (10)54.07%
Government Backed10.63% (6)19.08%
Low Risk12.91% (6)15.09%
Moderate Risk10.63% (6)19.08%
High Risk12.91% (6)15.09%

Parag Parikh Tax Saver Fund

ParticularsThis SchemeCategory
No. of Stocks2143.27
Top 5 Stock Weight33.22%30.19%
Top 10 Stock Weight55.66%48.53%
Top 3 Sector Weight42.04%38.49%
Average mcap (Cr)73079.61126306.14
Holdings in large cap stocks39.9% (10)50.01%
Holdings in mid cap stocks10.63% (4)17.13%
Holdings in small cap stocks21.07% (6)17.13%

Performance of PPFAS Mutual Fund

Parag Parikh Long Term Equity Fund

Click here to know about Parag Parikh Long Term Equity Fund

Parag Parikh Liquid Fund

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Parag Parikh Tax Saver Fund

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Top Holdings of PPFAS Mutual Fund

Holdings Of PPFAS Mutual Funds

Click here to know about Top Holdings Of PPFAS Mutual Funds

Why Invest in PPFAS Mutual Fund

Investing can be a real gamble sometimes. With the market being so volatile, it is never a good idea to invest heavily in one go. So, what would you instead do? Invest in something for a short time that is very volatile or invest in something long-lasting that might yield good results in the long run? The latter, of course.

PPFAS AMC has been helping investors for the past two decades and even has a wide range of sponsors that invest in them too. This not only proves the legitimacy of the company, but also tells you that this company is there for the long run.

The AMC has an accomplished set of fund managers and employees that dedicate their lives to give their customers the best experience possible. Here, fund managers rely on time tested investment principles rather than volatile algorithms and technical charts, which help us to give out the best possible outcome for your investments. Even the employees have claimed to invest most of their savings in this company’s schemes and have reaped individual profits themselves.

Also, PPFAS AMC does not oversell any of their schemes. They do not fancy themselves as mutual fund magicians who will double or triple profits in a very little time. They give it to you straight. This is a long term investment company that works on the solid fundamental framework of the market, which will prove to be profitable at the correct time. AMC is more cautious in terms of its principles and methods. They do not want to overstate any claim and would not want to invest in high-risk slots. Least loss and more profit is their motto.

How to Invest in PPFAS Mutual Fund?

Investing in PPFAS is not that difficult. All you have to do is the following:

  • Step 1: Identify your investment

    • Start reviewing public filings as this will give you the basic idea of where to invest.
    • Have a look at the periodic quantitative screens.
    • Once you get a good idea about the screening, start tracking businesses and industries to invest in.
    • Get a personal survey done for yourself on the business you are willing to invest in
  • Step 2: Start your fundamental research

    • Analyze the industry yourself to make sure you know everything about it to ensure you are comfortable investing in something like that.
    • Now start your competitive analysis of the business v/s peers.
    • Start reviewing historical finances and operational data.
    • Do a thorough qualitative analysis of the business and management.
  • Step 3: Do the valuation study

    • Do a short historical standard valuation.
    • Compare your beliefs and findings with your peers.
    • Start your internal estimates & range of intrinsic value.
  • Step 4: Construct your portfolio

    • Start buying and selling; be opportunistic
    • Have a security risk control, but not more than 10% of the portfolio in single security (as per SEBI Guidelines)
    • Always follow portfolio guidelines to minimize the risk

Documents Required for PPFAS Mutual Fund

When it comes to documentation, you would not require much. All you need are usual official government documents like:

For Identity Proof

  1. Aadhar card
  2. PAN card
  3. Passport
  4. Driver’s License

You would also require an address proof and the following documents would be sufficient:

  1. Aadhar card
  2. Passport
  3. Driver’s License
  4. Recent Utility Bill
  5. Apartment/Lease agreement.

Go With the PPFAS Mutual Fund for a Risk-Free Investment

Entering the investment world can be confusing and scary. But with the right guidance and proper research, you can invest appropriately without much risk. PPFAS is a good option to invest in, especially for beginners because of the low-risk.

FAQs on PPFAS Mutual Fund

What does AMC stand for?

A. AMC is nothing but Asset Management Company. It is an organization that deals with all the collected funds from various investors and then invests them in different financial securities to generate profits.

What does NAV stand for?

A. NAV stands for the Net Asset Value. This measures the performance of a single mutual fund scheme of the AMC. In other words, NAV is the market valuation (finding the worth of the market securities) of different securities the funds have been invested in.

So, the NAV per unit can be derived from dividing the total market value of all the invested securities by the overall number of units issued. The NAV of a mutual fund changes almost every day because the number of unitholders and valuation of securities also undergo a drastic change daily.

What is meant by the Expense Ratio?

A. Expense Ratio is nothing but a small amount of fee that is charged by the Asset Management Companies yearly, to evaluate and manage the assets of various investors. This small commission covers the operating and maintaining cost undertaken by the AMC. This comes under a percentage of the total assets invested by the investor.

What is meant by Entry Load?

A. When an investor purchases specific units of a mutual fund scheme for the first time, he/she is charged a small amount of processing fee by the Asset Management Company. This fee is reasonable and is known as an Entry Load.

What is meant by Exit Load?

A. When the investor wants to redeem his/her investment from a mutual fund scheme, the AMC charges the client a small amount of processing fee that comes under the Exit Load (or is known as the Exit Load itself). This fee is also charged when an investor wants to switch to different mutual fund schemes of a specific AMC.

Can investments be made on behalf of minors?

A. Yes, as a matter of fact, investments can be made on behalf of minors. But there are certain regulations that you have to adhere to as well.

  1. The minor has to be the first and the only holder of the account (portfolio). No joint accounts are allowed with minors.
  2. The guardian should be a mother or father, or in exceptional situations, a court-appointed legal guardian.
  3. The official documents accepted for the minor are a birth certificate, passport copy, etc. which provide evidence of the date of birth of the minor and relationship of the guardian with the minor should be compulsorily provided while opening the folio.
  4. PPFAS Asset Management Private Limited (the "AMC") / PPFAS Mutual Fund will register standing instructions like SIP/SWAP on the folio held by the minor (existing or new folio) only till the date of the minor attaining majority. This is applicable even though the instructions may be for a period beyond that date.