Investing in flexi cap funds has gained popularity, offering investors the flexibility to benefit from large, mid, and small-cap stocks based on market trends. With Parag Parikh Flexi Cap Fund and HDFC Flexi Cap Fund among the largest in this category, investors may wonder which fund offers better SIP returns and overall value.
Let’s dive into a comparison of these two powerhouse funds to see how they stack up in both SIP and lump-sum returns.
Fund Overview: Parag Parikh Flexi Cap vs. HDFC Flexi Cap
Both Parag Parikh Flexi Cap Fund and HDFC Flexi Cap Fund rank among the top three flexi cap funds by assets under management (AUM). While Parag Parikh Flexi Cap leads with a massive AUM of Rs.82,146 crore, HDFC Flexi Cap follows with an AUM of Rs.64,928 crore. Both funds have strong historical performance, but their investment strategies and sector preferences differ, impacting the returns.
Here’s a breakdown of each fund:
Parag Parikh Flexi Cap Fund
- Total AUM: Rs.82,146 crore
- Expense Ratio:
- Regular Plan: 1.33%
- Direct Plan: 0.63%
- Launch Date: May 24, 2013
- Top Sectors: Banks (20.08%), Cash & Equivalents (15.58%), IT-Software (6.02%)
- Top Holdings: HDFC Bank, Power Grid Corporation, Bajaj Holdings, Coal India, ITC
Lump-Sum Returns
- Since Inception: 19.83% per annum
- Rs.1 lakh invested at inception is now worth Rs.7,92,780
- 10-Year Return: 18.23% per annum
- Rs.1 lakh invested is now worth Rs.5,34,380
- 5-Year Return: 24.67% per annum
- Rs.1 lakh investment grew to Rs.3,01,550
- 3-Year Return: 16.35% per annum
- Rs.1 lakh investment grew to Rs.1,57,700
- 1-Year Return: 35.79%
- Rs.1 lakh investment is now Rs.1,35,910
SIP Returns
- Since Inception: 20.24% per annum
- Rs.10,000 monthly SIP now totals Rs.48,08,521 from a Rs.13,80,000 investment
- 10-Year SIP: 20.56% per annum
- Rs.10,000 monthly SIP now totals Rs.35,49,279 from a Rs.12,00,000 investment
- 5-Year SIP: 25.43% per annum
- Rs.10,000 monthly SIP now totals Rs.11,24,611 from a Rs.6,00,000 investment
HDFC Flexi Cap Fund
- Total AUM: Rs.64,928 crore
- Expense Ratio:
- Regular Plan: 1.43%
- Direct Plan: 0.77%
- Launch Date: January 1, 1995
- Top Sectors: Financial, Consumer Discretionary, Technology
- Top Holdings: ICICI Bank, HDFC Bank, Axis Bank, Cipla, HCL Technologies
Lump-Sum Returns
- Since Inception: 19.38% per annum
- Rs.1 lakh invested at inception is now worth Rs.1,95,03,950
- 10-Year Return: 15.96% per annum
- Rs.1 lakh invested is now worth Rs.4,40,220
- 5-Year Return: 24.83% per annum
- Rs.1 lakh investment grew to Rs.3,03,471
- 3-Year Return: 25.67% per annum
- Rs.1 lakh investment grew to Rs.1,98,616
- 1-Year Return: 45.76%
- Rs.1 lakh investment is now Rs.1,46,066
SIP Returns
- Since Inception: 21.74% per annum
- Rs.10,000 monthly SIP now totals Rs.18,40,32,948 from a Rs.34,80,000 investment
- 10-Year SIP: 19.47% per annum
- Rs.10,000 monthly SIP now totals Rs.33,45,968 from a Rs.12,00,000 investment
- 5-Year SIP: 28.73% per annum
- Rs.10,000 monthly SIP now totals Rs.12,17,158 from a Rs.6,00,000 investment
Comparing Investment Styles and Returns
Sector Allocations
Parag Parikh Flexi Cap Fund leans toward financial and IT sectors, with notable holdings in HDFC Bank and Power Grid Corporation. The fund’s sectoral allocation suggests a conservative, balanced approach, maintaining liquidity through significant cash reserves (15.58%).
HDFC Flexi Cap, on the other hand, diversifies across financial, consumer, and healthcare stocks, with substantial allocations in ICICI Bank and Axis Bank, which could offer higher growth potential but with increased volatility.
Performance Summary
- Short-Term (1-Year): HDFC Flexi Cap has the upper hand with a 1-year return of 45.76%, outpacing Parag Parikh’s 35.79%.
- Long-Term (Since Inception): Parag Parikh Flexi Cap has achieved steady growth, with a return rate of 20.24% per annum on SIPs, while HDFC Flexi Cap boasts an impressive 21.74%.
Expense Ratios
Parag Parikh offers a lower expense ratio for both its direct and regular plans compared to HDFC Flexi Cap, making it a more cost-efficient option over the long term.
Flexi Cap Funds: Which Fund Wins?
Both funds have proven to be strong performers, with Parag Parikh Flexi Cap focusing on balanced sector allocations and HDFC Flexi Cap taking a more diversified approach. For those looking at short-term gains, HDFC’s recent 1-year return of 45.76% might be appealing, while Parag Parikh Flexi Cap offers a slightly lower risk profile due to its moderate sector concentration and cash reserves.
The choice between Parag Parikh and HDFC Flexi Cap ultimately depends on individual financial goals and risk tolerance. Investors should consider their preferences and seek professional advice before making a final decision.
