In the universe of offerings from mutual fund houses, some schemes don’t just participate, they define the very category they are in. The PPFAS Flexi Cap Fund has done exactly this as it has become almost synonymous with the flexi-cap category itself. A staple recommendation from experts, this fund house recently achieved a milestone of their AUM soaring past the Rs 1 lakh crore mark.
For PPFAS, this began with a simple yet profound idea, to create a mutual fund scheme so compelling that its own creators would want to invest their money in and confidently recommend it to friends and family. And this very genesis principle has steered PPFAS through varying market cycles and volatility.
As Rajeev Thakkar, chief investment officer and equity fund manager at PPFAS, puts it, “Our genesis principle was to build a mutual fund scheme where we would be excited to put our money in, that we will be able to recommend as well.”
Genesis Principle, Opportunities And Gradual Growth
This core philosophy has remained steadfast, evolving only to embrace global opportunities, while maintaining a concentrated focus on their flagship flexi-cap scheme. The PPFAS investment philosophy is not about chasing fleeting market highs, the team says, it’s a marathon, not a sprint, according to Thakkar.
“What matters to us is downside protection, compounding and finally returns over a cycle,” Thakkar explains. Their focus isn’t rigidly fixed on beating the index, acknowledging that sometimes they might, and sometimes they might not. Instead, it’s about diligent research and taking on opportunities when they arise.
“Basically for cash calls, we look for opportunities. It is based on research, earnings and more developments,” he adds, highlighting a proactive, research-driven approach to market movements.
Global Investments, Value And Research
Raunak Onkar, fund manager and research head, elaborates on the expansive mandate that has guided PPFAS since its inception, “The mandate since the beginning was to invest wherever we see value, whichever geography or asset class.”
This approach, perfectly enabled by their flexi-cap fund, allows them to spread a wide net, beyond geographical boundaries. This has been a highlight as the fund has had global exposure for a while now.
“Our goal has been to look beyond India in a global basis, so we get a sense of valuation as well,” Onkar notes. This global perspective helps them identify undervalued opportunities and even unique companies like Google, Amazon and more where they find the best value when looked at and researched the way they do.
Debt, Real Estate Exposure And Cash Calls
When it comes to the debt component of the portfolio, Raj Mehta, executive vice president and debt fund manager, emphasizes liquidity and opportunistic deployment.
“Debt is mostly in money markets. The idea is to move with opportunity so liquidity is prime,” Mehta states. With approximately 25% cash by the month end, these funds are strategically channeled into money market, arbitrage funds and more.
A notable recent addition to their flexi-cap fund is exposure to real estate through REITs or Real Estate Investment Trusts. Mehta highlights the rationale, “We looked at these two that came with a distribution yield of 2.5% to 5%.” He anticipates further gains from occupancy, capital appreciation and rentals to go up. He views REITs as a good proxy to cash, acknowledging that while they offer promising returns, their liquidity needs to be built over time.
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