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PPFAS Mutual Fund has announced opening up acceptance of fresh transactions in its flagship scheme 'Parag Parikh Flexi Cap Fund', with effect from Tuesday, March 15, 2022.
Notably, in order to avoid breach of industry-wide overseas limits as allowed by the RBI, the SEBI (pursuant to the email dated January 28, 2022; along with AMFI Clarification dated January 30, 2022) had advised all AMCs to stop subscriptions in schemes intending to invest in overseas securities with immediate effect.
Accordingly, many AMCs including PPFAS had decided to temporarily suspend the transactions in schemes having overseas exposure.
Read: International Funds Stop Fresh Transactions. Is It a Worrying Sign?
Following SEBI's advice, PPFAS Mutual Fund had temporarily stopped accepting fresh Lumpsum and Systematic Transactions in Parag Parikh Flexi Cap Fund which holds around 30% of its assets in offshore equities. While the existing SIP / STP investment in the scheme continued.
This had forced investors to wait to start new investments in Parag Parikh Flexi Cap Fund until it is reopened by the fund house.
Despite SEBI's directive on stopping fresh investments abroad, still there has been no action by the RBI about the reconsideration of overseas investment limits, and accordingly, the mutual fund industry has no clear visibility about the revision of overseas investment limit.
Considering the investors' interest and preference about benefiting from investment opportunity in Parag Parikh Flexi Cap Fund, after the recent market crash, the fund house has decided to open up the scheme for acceptance of transactions.
As there is no change in the overseas investment limit, the fresh net inflows in the scheme will have to be invested primarily in domestic equities. Accordingly, the weightage of foreign stocks or offshore equities in Parag Parikh Flexi Cap Fund is expected to come down gradually over time.
The fund house has mentioned that it will consider rebalancing the portfolio as per the then prevailing situation and valuations, as and when overseas investment limits are increased.
Investors looking for investment in the fund may consider this as an opportunity. However, make sure it matches your risk appetite, suitability, and investment preference.
Detailed analysis: Parag Parikh Flexi Cap Fund: Investing across Geographies to Reduce Risk