PPFAS plans new large-cap fund, sparks investor questions on one-equity-fund philosophy; CEO Parikh to clarify

PPFAS Mutual Fund, known for its disciplined approach and long-held stance against multiple equity products, has filed papers with the Securities and Exchange Board of India (SEBI) to launch a new open-ended large-cap equity scheme benchmarked to the Nifty 100 Total Return Index.

The proposed Parag Parikh Large Cap Fund marks the fund house’s first new equity offering in over a decade, after its flagship Parag Parikh Flexi Cap Fund (other than the ELSS fund). It has prompted curiosity and questions from long-term investors about how it fits within PPFAS’s long-established philosophy of maintaining a lean product line-up.

Responding to the discussion, Neil Parikh, Chairman and CEO of PPFAS Mutual Fund, said the team would provide a detailed explanation at the unitholders’ meeting on November 22. “We have said we’ll only launch new schemes if we can provide any simplification or differentiation to the category or scheme, are excited to invest our own money, or if regulatory changes compel us. The first two reasons apply to the launch of our large-cap fund,” he said in a tweet.

In a follow-up tweet, Parikh added: “So, getting a lot of questions, criticism, and general curiosity on this… all valid points on various aspects of scheme differentiation and the fund house strategy… hard to answer each query individually, hence we will give proper explanation and overview at the unit-holders meet on why (we are) excited to launch this large cap fund.”

PPFAS growth story

PPFAS built its reputation on simplicity and transparency, starting with a single diversified equity fund that blended Indian and global equities. The Parag Parikh Flexi Cap Fund, launched in May 2013, has since grown into one of India’s largest actively managed equity schemes, managing over Rs 1.25 lakh crore as of October 2025.

The fund has delivered strong long-term performance, with 19.77 percent annualised returns since inception and 18.48 percent over the last 10 years (direct plan). Its benchmark, the Nifty 500 TRI, has returned 15.21 percent and 14.64 percent, respectively, over the same periods.

The Flexi Cap fund’s mandate allows at least 65 percent investment in Indian equities and up to 35 percent in overseas equities and debt instruments, a strategy that has long differentiated it through exposure to global companies alongside domestic holdings.

Over the years, PPFAS added a few carefully chosen schemes -- including the Parag Parikh ELSS Tax Saver Fund in 2019, the Conservative Hybrid Fund in 2021, and more recently, the Dynamic Asset Allocation and Arbitrage funds. Each was positioned as distinct in purpose -- tax-saving, income-oriented, or asset-allocation tools -- rather than as overlapping equity products.

PPFAS’s new large-cap equity fund

However, the sheer size of the Flexi Cap Fund with over Rs 1.25 lakh crore may justify the need for a separate vehicle with a narrower universe of domestic large-cap stocks and simpler risk profile.

According to the draft scheme information document filed with SEBI, the Parag Parikh Large Cap Fund will invest 80-100 percent of its assets in large-cap stocks and may invest up to 20 percent in other equities or foreign securities, keeping a limited international investing window consistent with the fund house’s global investing style.

The fund will carry no entry or exit load and will benchmark its performance to the Nifty 100 TRI, which captures India’s largest 100 listed companies.

Balancing discipline and evolution

Investors are watching the proposed launch to see whether PPFAS can expand its offerings while retaining the focus that defined its identity. The fund house has long maintained that it would only add new products if they served a clear purpose and avoided duplication.

At the same time, the new fund could provide a simpler, domestic-focused alternative to the increasingly large Flexi Cap Fund, offering a narrower large-cap universe for investors seeking less complexity. Parikh’s upcoming address at the unitholders’ meeting is expected to outline this rationale in full.

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