PPFAS Flexi Cap raises BER from Aug 25; IT exposure jumps 3.4% in 6-month portfolio shift

Mutual fund investment: PPFAS Mutual Fund has announced a marginal increase in the Base Expense Ratio (BER) of its flagship Parag Parikh Flexi Cap Fund, effective August 25, 2026, even as the scheme's six-month portfolio journey shows selective buying, low churn and a notable increase in IT exposure.

PPFAS Mutual Fund said the BER of Parag Parikh Flexi Cap Fund will rise from 0.52% to 0.53% for the Direct Plan and from 1.04% to 1.05% for the Regular Plan from August 25. The communication to unitholders cited Regulation 66(7) of the SEBI (Mutual Funds) Regulations, 2026.

The AMC said BER represents recurring costs incurred in managing and operating a mutual fund scheme that are directly controlled by the AMC. It comprises expenses specified under Regulations 66(4), 66(5) and 66(6), excluding applicable statutory levies, brokerage costs and transaction costs incurred for trade execution.

The fund had assets under management of more than ₹1.48 lakh crore as of July 31, 2026.

Six-month portfolio journey

Between February and July 2026, the fund maintained a relatively stable portfolio, with holdings moving from 40 in February and March to 39 in April and May, before returning to 40 in June and July. The fund recorded just three total buys and two complete exits, while overall turnover stood at only 6%.

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HCL Technologies emerged as the biggest weight gainer, increasing by 1.40 percentage points, while Power Grid Corporation was the biggest weight loser, declining by 0.90 percentage point.

The fund's asset allocation also shifted during the period. Equity allocation rose from 76% in February to 81% by May, remaining at that level through July.

IT leads industry additions

The strongest industry-level increase came from IT-Software, whose portfolio weight rose from 6.9% in February to 10.3% in July, an increase of 3.4 percentage points. Diversified FMCG gained 0.7 percentage point to 5.7%, while Pharmaceuticals & Biotechnology edged up 0.1 percentage point.

Power recorded the largest industry-level reduction, falling from 6.9% to 6.0%, a decline of 0.9 percentage point. Automobiles, Computer Software and Consumer Fuels also saw modest reductions.

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Banks remained the largest industry exposure at around 20% in July, broadly unchanged from February.

Among individual holdings, HDFC Bank remained the largest position at 7.5% in July, followed by Power Grid Corporation at 6.2%, ITC at 5.7%, ICICI Bank at 5.6% and Coal India at 4.9%.

Parag Parikh Flexi Cap Fund: Key Portfolio Changes

Short-term performance lags benchmark

The fund lagged the Nifty 500 TRI over three and six months, with negative alpha of 4.8% and 3.6%, respectively. One-year alpha was also negative at 5.9%.

However, the longer-term picture remained stronger, with alpha of 1.7% over two years, 1.6% over three years, 2.3% over four years and 1.3% over five years. Its five-year CAGR stood at 13.4%, compared with 12.1% for the Nifty 500 TRI.

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