Parag Parikh Large Cap NFO on Jan 19: Can smart execution beat expensive active funds? 

PPFAS Mutual Fund has announced the new fund offer (NFO) dates for the Parag Parikh Large Cap Fund, setting the stage for the launch of its much-anticipated large-cap equity scheme. The NFO will open for subscription on January 19 and close on January 30, with the scheme reopening for continuous purchase and redemption from February 6. The fund will be benchmarked against the Nifty 100 Total Return Index (TRI).

The launch marks a significant expansion of the fund house’s equity product portfolio. First unveiled in November 2025, the Parag Parikh Large Cap Fund is the firm’s first new equity offering in nearly five years and only its third equity scheme, following the Parag Parikh Flexi Cap Fund and the Parag Parikh ELSS Tax Saver Fund. The move reflects PPFAS’s intent to offer investors a differentiated large-cap strategy at a time when many actively managed funds are struggling to consistently outperform benchmarks.

Parag Parikh Large Cap Fund structure

Unlike conventional large-cap funds that rely heavily on stock selection driven by valuations and fundamentals, the Parag Parikh Large Cap Fund is designed to follow a more index-like portfolio construction with an added layer of active execution. The fund aims to hold most Nifty 100 stocks in broadly similar weights, with individual stock exposure capped at 10 per cent. However, it will not be forced to rebalance mechanically on index change dates. Instead, it will seek to time trades more efficiently to avoid paying higher prices during temporary spikes caused by index inclusions or exclusions.

Smart Execution strategy

A key feature of the scheme is its focus on what the fund house calls “Smart Execution” strategies. These include using single-stock futures or index futures when they trade at a discount to spot prices, allowing the fund to gain exposure more cost-effectively. The scheme may also employ merger-related arbitrage when stocks trade below announced merger ratios, adopt staggered rebalancing when index constituents change, and take small opportunistic positions around corporate actions such as demergers. The overall objective is to keep the fund’s active share low—below 10 per cent—while still improving execution efficiency and reducing impact costs.

In terms of cost, the fund is positioned as a low-expense alternative within the large-cap category. The expense ratio is expected to be in the range of 10 to 30 basis points, making it competitive with existing Nifty 100 index funds despite being actively managed. The scheme carries no entry or exit load and falls under the large-cap fund category.

Parag Parikh Large Cap Fund allocation

The asset allocation framework provides flexibility within a disciplined structure. The fund will invest 80 to 100 per cent of its assets in equities and equity-related instruments of large-cap companies. Up to 20 per cent can be allocated to other equities, including foreign stocks, while debt and money market instruments may account for up to 20 per cent. Investments in REITs and InvITs can go up to 10 per cent, adding a limited income-oriented dimension.

According to the fund house, the Parag Parikh Large Cap Fund is aimed at investors seeking long-term capital appreciation through a portfolio that closely tracks the market while attempting to improve outcomes through smarter execution rather than aggressive stock picking. By keeping portfolio turnover and expenses low, the scheme seeks to bridge the gap between passive investing and traditional active management.

As large-cap funds face increasing pressure to justify higher fees and volatile performance, PPFAS’s new offering represents a hybrid approach—one that blends the stability of index investing with selective, execution-driven strategies. With the NFO set to open next week, market participants will be watching closely to see whether this differentiated model gains traction among investors looking for consistency in the large-cap space.