Parag Parikh Flexi Cap Fund Reduces Cash Reserves to 9.77 Percent
The fund accelerates capital deployment as CIO Rajeev Thakkar identifies new market opportunities.
1Cash Allocation Trends
The Parag Parikh Flexi Cap Fund significantly reduced its cash, debt, and arbitrage holdings to 9.77% in September 2026. This figure represents a sharp decline from the 18.94% recorded in March 2026. The reduction reflects a strategic shift toward deploying reserves into equity positions as the fund manager identifies more attractive market opportunities.
2Strategic Investment Philosophy
CIO Rajeev Thakkar emphasizes that the fund prioritizes individual stock merits over macroeconomic forecasts. The fund maintains a flexible approach, choosing not to rely on broad market timing for asset allocation. This methodology allows the management team to deploy capital selectively whenever they perceive specific assets are trading at attractive valuation levels.
3Execution of Capital Deployment
The fund did not initiate any new stock positions during September 2026. Instead, it focused on increasing existing holdings, most notably adding 390.64 lakh shares of DLF. Other companies receiving increased capital include Petronet LNG, Indus Towers, and Indraprastha Gas, while the fund completely exited its position in Great Eastern Shipping Company.
4Portfolio Stability Measures
Despite the active deployment of cash, the fund kept its holdings in several major blue-chip companies unchanged. Positions in HDFC Bank, Power Grid, ITC, Coal India, ICICI Bank, Kotak Mahindra Bank, and Infosys remained stable throughout the month. This suggests a balanced strategy of adding to high-conviction stocks while maintaining core portfolio anchors.
5Historical Performance Context
Since its inception in May 2013, the fund has delivered a 17.76% return, outperforming the Nifty 500 TRI benchmark's 13.56%. While it outperformed the benchmark over three and five-year periods, the fund experienced a 3.54% decline during the one-year period ending September 2026, slightly trailing the benchmark's 2.03% drop during that specific timeframe.
6Management Outlook on Liquidity
Rajeev Thakkar previously noted that holding higher cash levels during the preceding two years provided a margin of safety in sideways markets. With cash levels now reaching single digits, the fund is signaling a transition toward a more fully invested posture. This move aligns with the manager's stated intent to capitalize on emerging opportunities.
7Operational Fund Dynamics
As the largest active mutual fund scheme by AUM in India, these allocation changes carry significant weight in the market. The consistent reduction in deployable reserves over six months indicates a deliberate, phased entry into equity markets. The fund continues to monitor liquidity levels to ensure it can act when attractive valuations appear.
8Investor Takeaways
The shift to 9.77% cash highlights a move toward higher market exposure. Investors should note that the fund remains focused on bottom-up stock selection rather than macro-driven bets. While historical returns remain strong, the current strategy reflects a proactive stance in navigating the evolving equity landscape through selective, incremental increases in existing portfolio holdings.
Original article: mint - money — Parag Parikh Flexi Cap Fund Reduces Cash Reserves to 9.77 Percent