“Don't go overboard on small- and mid-cap stocks”

Parag Parikh Financial Advisory Services' Rajeev Thakkar on why investors should avoid the volatile stocks

- BY SIDDHARTH ZARABI

One of India’s leading mutual fund companies, Parag Parikh Financial Advisory Services (PPFAS), has two of its schemes in the BT-VR Top 100 Mutual Fund Schemes.

Parag Parikh Flexi Cap Fund, with ₹1.15 lakh crore, has the largest assets under management (AUM) among equity schemes, while Parag Parikh ELSS Tax Saver Fund has an AUM of ₹5,524 crore. In this exclusive interview with Siddharth Zarabi, Group Editor, Business Today, Rajeev Thakkar, CIO & Director of PPFAS Mutual Fund, shares his insights on market trends, evolving investor behaviour, and what lies ahead for India’s mutual fund investors. Edited excerpts:

Q: At the outset, can you share how your core investment philosophy balances conviction in fundamentals with the lure of short-term themes and high-beta opportunities?

A: Typically, the life situations, goals, aspirations, and risk appetite of investors do not change within 12 months. At best, some small tweaks may be required here and there. So, to your question as to how one balances the longer-term fundamentals and convictions with the shorter-term noise, my recommendation would be to have a small allocation to these tactical things (macroeconomic uncertainties). People either go overweight on equity or underweight on equity in terms of their asset allocation. The bulk of the investing should be driven by their life situation. I wouldn’t recommend a 70-year-old requiring monthly cash flows to be heavy in equity, and a 25-year-old with a long investing career ahead should be equity-heavy despite the noise. I would recommend tuning out of some of these headlines that concern us on a day-to-day basis.

Q: How should an investor also read the prospects of the market for the new Samvat (Hindu solar calendar)?