Why do content creators keep talking about Parag Parikh Flexicap? Because they know it will garner interest from both unitholders and bystanders. The best way to handle this is to avoid watching any financial content on social media or YouTube, so the algorithms think you don’t care.
But that seems hard for most people. The next best thing to do is to ignore all these content creators (including yours truly). Many, if not most, pay attention to engagement farming because they neither have clarity nor conviction.
They choose Parag Parikh Flexicap when all the apps and websites claimed it was a great fund. Some who could not decide between active and passive investing decided to add an index fund to this flexicap.
A good chunk of stock and mutual fund investors have not experienced a sideways market. They saw the COVID crash and assumed they had lived through the worst and had become ‘seasoned’. The worst phase of the stock market is not violent up or down swings but the doldrums of a sideways market that can extend for years!
Equity can test your patience and how! Once you lose it, everything about your less-performing holdings would seem wrong – the size, the cash held, the stock picks, the change in holding market cap. Content creators exploit this and ask you to join the bandwagon of backseat drivers.
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Before we consider the options before an investor, and to see past the social media noise, we need to look at the facts.
1. At 1,48,429 crores, Parag Parikh Flexicap is huge! The next largest in the category is HDFC Flexicap at 1,10,736.4 Crores. All other funds in the category have less than 50% of PPFC’s AUM! With the exception of SBI Nifty 50 ETF, which holds a big chunk of EPF AUM, PPFC is the largest equity fund in India.
It is an extraordinary achievement. Will its size contribute to its downfall? No one can say for sure.
2. Parag Parikh Flexicap has become a large-cap-oriented fund. We published this in Nov 2025 – Parag Parikh Large Cap Fund – a curious choice
3. The large cap space is going through a sideways market.
4. Other flexicap funds are probably doing well. In the last 1, 2, 3, 4, 5-year trailing returns, it has not been a “top fund”.
These are the five-year rolling returns of the fund vs Nifty 500 TRI. Five years because that is the longest rope I would give an active fund manager to outperform its benchmark for the fee charged. That is not terrible “underperformance”.
This rolling returns chart was created with the MF analyser tool part of the freefincal investor circle.
5. For a myriad of reasons, funds go through periods of outperformance and underperformance. No one is exempt from the law of averages.
The rest is speculation. If you expect your fund to perform every year or be a topper all the time, the fault is with your expectations and understanding of risk.
It is a waste of time trying to figure out ‘why’ the fund is not doing ‘well’. Many have opined on the reasons and sounded like it is a fact. It is a bigger waste of time taking them seriously.
The fund’s performance can become worse or better in the future. No one, including the fund manager, knows the future.
So, what are your options?
1. Keep the faith and stay invested. You are comfortable with your returns and the fund’s performance since you invested, and you want to give the fund manager some more time. I am an NFO investor in this fund and I have a huge concentration risk in this. See: 18 years of mutual fund investing: My Journey and lessons learned. At least for the time being, I am not doing anything. I have no other rationale other than that I am too tired and too old to react to these changes.
2. Switch to another active fund. But you will have to face the same risks of underperformance there again. Those who take this route will prefer this, will keep existing units in Parag Parikh Flexicap as is and invest in another active fund. If they keep this up, their portfolio will be cluttered with active funds, and they will be “buying the entire market” for an expensive fee (overall portfolio performance could tend to that of the index).
3. Switch to index investing, especially if your exposure is small. No more worrying about fund performance, fees or star ratings.
If you are going to do nothing, then stay away from financial content. If you are going to act, then use this as an excuse to do proper goal-based investing and pick suitable alternative funds.