Parag Parikh Large Cap Fund, an actively managed large cap fund benchmarked to the Nifty 100 TRI, is currently in its NFO period (19th -30th Jan 2026). We discuss whether investors should consider buying this fund.
The fund is marketed as a “passive plus” fund with a low expense ratio that tends to track the benchmark, except in special circumstances.
These were discussed in the last unit holder’s meeting. This is a brief summary of these “smart strategies”
- Single-stock futures at a discount: Using futures contracts when they trade below spot prices to gain more cost-effective market exposure.
- Index futures at a discount: Deploying index futures when available at discounts to spot prices, enabling cheaper market entry, especially during market turmoil
- Merger-related opportunities: When a company in an index is merging with another firm, buy the stock which is at a discount to the merger ratio.
- Smarter rebalancing: Gradually rebalancing when Nifty 100 composition changes are announced instead of executing trades mechanically on the actual index change dates, which can result in trades at better prices.
- Opportunities related to special situations like demergers: Unlike index funds, an active fund will not be forced to sell a demerged smaller unit of a company removed from the index on the demerger date. They can do so gradually.
- Covered call strategy: Selling call options at prices much higher than the current market price on stocks already owned. The cash received on sale is called premium income. If the call option price is exceeded, the stocks owned are sold for a capital gain. If not, nothing is done, and the premium income already obtained is the gain. The fund expects to help gain a small extra return with this strategy during sideways markets when most call options will expire worthless. See the scheme information document for an example.
Will all these gymnastics result in a perceptible/significant higher return (wrt Nifty 100 TRI), or will their benefits get washed away in market volatility “over the long term”? This remains to be seen. I have my reservations, but I will be glad to change my mind if there is a large enough data set (5+ years).
For this reason alone, I do not see any compelling reason to invest in this fund. What is more important is that the interested reader should ask
🔥Secure your future with our Robo-advisory tool trusted by over 3,500 investors and advisors. From effortless retirement planning to funding your children’s biggest dreams, turn your financial goals into reality. 🔥
Subscribe for money management solutions via email! (Link takes you to our email sign-up form) Join 32,000+ readers in our community.
👉 New Tool Alert! NaviPlan: A Privacy-Focused Multi-asset Tracker and Goal Planner 👈
- Is there a place for a large cap fund in my portfolio? For most active and passive fund investors, the answer will be no. So buying the Parag Parikh Large Cap Fund will only result in clutter.
- For the very few existing investors who were gung-ho on mid and small cap funds and have now realised how volatile they can be, Parag Parikh Large Cap Fund can be an option, but a Nifty 50, Nifty 100, or even Nifty 500 index fund would be a simpler option.
- For the newbie investor who has a FOMO about choosing only passive funds, Parag Parikh Large Cap Fund can be an option, provided they have the right expectations (meaning do not expect too much outperformance)
- “I already hold their flexicap fund. Should I direct new investments in this NFO?” I do not see any clear benefit in doing this. Will this large cap fund outdo the flexicap fund? No one knows.
In November, when we wrote – Parag Parikh Large Cap Fund -a curious choice, some readers speculated that this fund would be part of their gift city offering for NRIs (inbound fund), along with their flexicap. This has turned out to be true. Was this the main motive for launching the large cap fund? I have no clue. But I do expect a good chunk of the large cap fund’s AUM from Gift City investments over time.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
Use our Robo-advisory Tool to create a complete financial plan! More than 3,000 investors and advisors use this! Use the discount code robo25 for 20% off. Plan your retirement (early, normal, before, and after), plus non-recurring financial goals (such as child education) and recurring financial goals (such as holidays and appliance purchases). The tool helps anyone aged 18 to 80 plan for retirement, plus six non-recurring and four recurring financial goals, with a detailed cash flow summary.
🔥Join our community of 9000+ users! 🔥Avail massive discounts on our courses + freefincal investor circle!
Track your mutual funds and stock investments with our Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds, ETF screeners, as well as momentum and low-volatility stock screeners.
You can follow our articles on Google News
We have over 1,000 videos on YouTube!
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth!
You can watch podcast episodes on the OfSpin Media Friends YouTube Channel
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalised investment advice. We can write a detailed article without mentioning your name if you have a generic question.
About The Author
Dr M. Pattabiraman (PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over 14 years of experience publishing news analysis, research and financial product development.
Connect with him via Twitter(X) LinkedIn YouTube
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,500 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market conditions! Watch the first lecture for free! One-time payment! No recurring fees! Lifelong access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Increase your income by getting people to pay for your skills! More than 900 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner seeking more clients through online visibility, or a salaried individual looking for side or passive income, we will show you how to do it by showcasing your skills and building a community that trusts and pays you. (Watch the 1st lecture for free). One-time payment! No recurring fees! Lifelong access to videos!
Our book for kids: “Chinchu Gets a Superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting a side income via content writing. It is available at a 50% discount for Rs. 500 only!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy
Freefincal is a News Media organisation dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact Information: To get in touch, please use our contact form. (Sponsored posts or paid collaborations will not be entertained.)Connect with us on social media
Our publications
You Can Be Rich Too with Goal-Based Investing
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
Your Ultimate Guide to Travel
