Latest news with #PPFAS
Economic Times
6 days ago
- Business
- Economic Times
Baroda BNP Paribas Liquid Fund turns Rs 1 lakh investment to nearly Rs 3 lakh in 23 years, AUM crossing Rs 10,000 crore
Baroda BNP Paribas Mutual Fund has completed 23 years of existence in the industry and has almost tripled investor wealth Rs1 lakh invested at launch to Rs 2,99,565 now and has crossed an AUM of Rs 10,000 crore. Baroda BNP Paribas Liquid Fund is a trusted solution for investors seeking capital protection, liquidity, and stable short-term returns and crossing a significant milestone of the scheme AUM at Rs 10,500 crore in Average Assets Under Management (AUM) mark. Also Read | Nearly 112 lakh SIPs closed in 2025: Should you worry about the negative net SIP trend? The fund is managed by Vikram Pamnani and Gurvinder Singh Wasan. The performance of the fund is benchmarked against CRISIL Liquid Debt A-I Index. Baroda BNP Paribas Liquid Fund has delivered an annualised return of 7.09% return over the past one month, reaffirming its reputation as a reliable option for managing surplus funds, according to a press release. With global markets experiencing volatility amid geopolitical uncertainty and policy shifts — including U.S. sentiment swings under the Trump era — many investors are adopting a "wait and watch" approach. For those looking to safely park capital while staying liquid, liquid funds present an attractive alternative to traditional savings accounts, the release said. Baroda BNP Paribas Liquid Fund achieves this through prudent investment in short-term debt instruments with minimal price risk and low credit risk. With a modified duration of just 55 days, the fund offers liquidity while aiming to generate returns higher than conventional savings investors seek safety, liquidity, and predictable returns, the Baroda BNP Paribas Liquid Fund continues to stand out as a safe haven for short-term money management, proving its relevance even 23 years Read | Mutual funds slashes cash allocation by Rs 13,000 crore in June; PPFAS and Quant MF join trendBaroda BNP Paribas Liquid Fund is an open-ended liquid scheme with a relatively low interest rate risk and moderate credit risk to the Sebi mandate, liquid funds make investment in debt and money market securities with maturity of up to 91 days only. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Indian Express
21-06-2025
- Business
- Indian Express
What Parag Parikh understood about investing that others didn't
I've come across this situation more than once — and perhaps you have too. At a social gathering or a wedding, a small group begins discussing stocks. Someone says, 'I bought this stock at 200, now it is 500.' Another adds, 'I told you about it, but you did not listen.' A third one chimes in with a tip that a stock they believe is about to double next. The conversation is filled with enthusiasm, occasional regret, and a great deal of confidence. Nearly everyone has something to contribute. Such conversations are common. It is always about chasing the next opportunity, seldom about understanding the one already taken. This raises a broader question: if these are the kinds of discussions seen occasionally in casual settings, what do seasoned investors encounter every day? Those who have spent decades in the markets. Those who have watched not just stock prices, but investor behaviour across cycles. People like Warren Buffett, Vijay Kedia, or R Damani. What must they have observed? What must they have understood that others could not? Because anyone can invest. But very few build a philosophy. Even fewer stick to it. Parag Parikh was one of those few. Parag Parikh spent years not just watching stock prices, but observing investors. As a broker in the 1980s and 90s, he dealt with all kinds of clients, from businessmen chasing the next tip, traders shaken by sudden losses, and long-term investors who got impatient halfway through the journey. Over time, he began to see patterns and, more so, how people thought. He realised that investor behaviour, not stock selection alone, was the real driver of long-term success. From that came five key behavioural insights — each rooted in something he saw go wrong, and each one consciously built into the investment process at PPFAS. Here's how. Where it began: Parag Parikh must have noticed a pattern among investors that they often sold their winners too early, afraid the gains would vanish, but continued to hold on to poor performers, waiting for a recovery that might never come. People simply feared regret more than they desired rationality. What he built from it: He built a process focused on businesses that reduce the need for emotional decisions in the first place. That meant buying strong companies at reasonable prices, ones that offered both quality and staying power. This allowed investors (and the fund) to hold through volatility without second-guessing every correction. How PPFAS applies it: A strong example is ITC. Between 2017 and 2020, ITC became one of the most unpopular large-cap stocks. Revenue growth was slow, the FMCG business was not scaling fast enough, and the stock remained in the Rs 180-220 range for over three years. Many investors lost patience and exited. But PPFAS stayed invested. Why? Because their thesis was based not on quarterly performance but on fundamentals, a debt-free balance sheet, high free cash flow, consistent dividend yield, and a dominant position in cigarettes and packaged foods. They believed value was building silently, even when the price did not reflect it. As of 2025, ITC is up over 90% from its 2020 lows, has expanded margins in its FMCG business, and significantly increased dividend payouts. This example shows how resisting loss aversion and trusting a business rather than reacting to market frustration can lead to long-term gains. And it is this ability to stay invested through the 'boring' phases that often separates a good process from a reactive one. Where it began: Parag Parikh often saw investors treat different pools of money differently. A monthly SIP would be invested carefully, but a year-end bonus or a sudden windfall would be put into a high-risk small-cap stock or an IPO without much thought. People mentally separated money by source, as salary money was 'serious,' and bonus money was 'extra.' He believed this bias led to inconsistent decisions, often based on emotion, not logic. What he built from it: To counter this, Parikh believed investors needed a single, goal-driven lens for all financial decisions. Whether it was SIP money, inheritance, or a one-time gain, it should be invested with the same level of discipline. That is also why he was against the idea of managing too many products for different moods or market cycles. He believed clarity was more valuable than variety. How PPFAS applies it: PPFAS still operates with that same mindset. It has maintained a simple, focused product lineup, comprising just one core equity fund that is the Parag Parikh Flexi Cap Fund, along with a tax-saving version (ELSS) of the same strategy. While it also offers an arbitrage fund, that is not positioned or managed as an equity fund in the traditional sense. There are no sectoral funds, no momentum strategies, and no new fund offers built around temporary themes or market cycles. Even when investor flows surged after Covid in 2021, and other AMCs rushed to launch 30-40 new schemes across smallcaps, ESG, and global themes, PPFAS resisted. They received regular feedback from distributors and investors asking, 'Why not launch a small-cap fund?' or 'Why not ride the momentum with a new-age tech basket?' But they chose not to. Because doing that, they believed, would give investors the illusion of choice, but encourage mental accounting that could lead to separate pots of money, each with its own logic, and ultimately, a disjointed portfolio. Instead, PPFAS guided investors to treat their capital as one, focusing on long-term wealth creation and allocating it through a single, well-diversified fund. A good example of how they handled inflows responsibly is from 2020 to 2021, when their AUM jumped sharply. Instead of deploying all the funds at once or chasing high-beta stocks, they remained selective, allocating gradually and sometimes even holding over 10% in cash and arbitrage positions, waiting for better valuations. Where it began: Parag Parikh often observed that investors found it very hard to let go of losing positions. Not because the business was still strong, but because they had already invested time, money, and emotion into it. He saw this during the K-10 stock boom in the late 1990s, where people held on to crumbling companies because they had entered at a higher price and did not want to 'book a loss.' The logic was simple: 'I have already put in so much, maybe it will bounce back.' But he believed this was one of the most damaging biases in investing. A stock does not know you own it. Your entry price does not matter to the business. Only the future does. What he built from it: Parikh designed an investment process where each holding was reviewed continuously against its thesis, not its cost price. If a company no longer met the standards of quality, governance, or growth visibility, it had to go. No matter how popular it once was. No matter how much time it had spent in the portfolio. He encouraged detachment, not indifference, but the ability to change your mind when facts changed. How PPFAS applies it: A clear example is Sun Pharma. PPFAS bought into Sun Pharma around 2018, when it was still India's leading pharma company. It had acquired Ranbaxy in 2015. The logic was that post-merger synergies, strong promoter pedigree, and domestic market leadership would continue to drive long-term returns. But over time, the situation changed. Regulatory issues with the US FDA, weak integration outcomes, and a decline in profitability raised red flags. The company was still well known, but its outlook became murky. Instead of holding on just because it was once a blue-chip name or because the fund had a large allocation, PPFAS trimmed its exposure significantly between 2023 and 2024. That was a classic implementation of Parikh's thinking. The question was not, 'Will it come back to our cost?' The question was, 'Does it deserve our capital going forward?' By focusing on future relevance rather than past commitment, the fund avoided getting trapped. Where it began: Parag Parikh had seen what happens when too many people chase the same idea. During the Harshad Mehta rally in 1992, he watched clients pour into stocks they barely understood, simply because everyone else was buying. The same thing happened again in the dot-com boom of 1999-2000 and the real estate-led rally of 2007-2008. Each time, the early gains drew more people in, and the fear of missing out replaced careful thinking. Parikh realised that when a stock or sector becomes too popular, the risk does not reduce; it multiplies silently. Everyone cannot exit at the same time. What he built from it: He built a deep resistance to consensus thinking. If everyone loved a stock, he asked why. If everyone were ignoring a sector, he became curious. He taught that investing is not about copying, it is about thinking independently. How PPFAS applies it: A strong example is PPFAS's decision to stay away from hyped IPOs and trending new-age businesses. In 2021, when the Indian IPO market saw a flood of digital-first companies, many mutual funds rushed to participate. These stocks were seen as the next frontier, priced aggressively, and backed by global capital. But PPFAS did not invest in any of them at the time of listing. Their reason was clear: most of these companies had weak profitability, unclear moats, and lacked a clear timeline to self-sustaining cash flows. It did not matter that they were trending. What mattered was that the valuation did not match the business model. By 2023, many of those names corrected sharply, some by over 40-60% from their IPO highs. Instead, PPFAS kept adding to companies like Bajaj Holdings, ICICI Bank, and Cognizant, none of which were popular at that time, but all had clean balance sheets, steady cash generation, and long-term potential. Their conviction was not driven by market sentiment, but by bottom-up research. Even globally, they added Amazon and Meta during periods when those stocks were under pressure, post-2022 correction, citing strong fundamentals and future earnings power, even though market opinion was still cautious. Herd behaviour also works in reverse. During pessimistic phases such as March 2020 or the early 2023 correction in US tech, PPFAS was willing to go against the prevailing mood and increase allocations in fundamentally sound but temporarily unloved names. In short, they continue to ask: Is this idea good? Or is it just popular? And that one question keeps them from making the same mistakes the crowd makes, just a little later. Where it began: Parag Parikh often said that most investors want long-term wealth but follow short-term behaviour. He saw it firsthand as clients who bought with a five-year view but sold in five weeks. The slightest correction, a missed quarterly estimate, or a new tip from a friend would trigger panic or FOMO. He realised that while the market offers daily prices, wealth is built over the years. This was one of his most fundamental beliefs: you cannot compound if you keep interrupting the process. What he built from it: He built a structure where patience is baked into the system. He believed in buying a business only if you were comfortable holding it through multiple cycles. This meant the portfolio had to be simple, conviction-led, and resistant to noise. He also believed in educating investors to align with this philosophy, which is why even today, PPFAS actively tells potential investors: If you cannot stay for five years, please do not invest. How PPFAS applies it: This thinking shows up in two clear ways: portfolio design and investor communication. On portfolio design: PPFAS maintains one of the lowest portfolio turnover ratios in the industry, consistently under 10%. That means they rarely sell just because a stock has moved. For comparison, most active equity funds in India have turnover ratios above 60-70%, which indicates more frequent buying and selling. Some examples of their long-held positions: ITC stayed in the portfolio even when it underperformed for nearly five years. Today, it is one of the fund's top performers. Nestlé India, HDFC Ltd., and Bajaj Holdings have remained core holdings for 5-8 years through multiple market cycles. On the global side, Alphabet (Google) and Amazon have been held through periods of extreme volatility, including the tech correction of 2022, with no panic selling. Their approach is clear: if the business fundamentals are intact, temporary price moves are not a reason to act. The decision to hold is based on the company's ability to grow free cash flow, expand margins, and reinvest capital effectively, not on short-term market opinion. On investor communication: Every year, they hold an annual unitholder meeting, where the CIO and fund managers openly answer questions, share what is working and what is not, and urge investors to stay the course. During the Covid crash in March 2020, PPFAS published detailed letters explaining why they were not making major changes. They did not reshuffle portfolios. They waited, trusted their holdings, and within 12-18 months, the fund had sharply outperformed peers who overreacted. Even as of 2024, the fund has told new investors clearly: This is not a fund built for quarterly comparisons or tactical moves. It is built for compounding. Parag Parikh observed how people behaved with money and the decisions they repeated, the habits that shaped outcomes, and turned those insights into a way of investing that focused on quality, patience, and clarity. That approach became a part of how the fund operates even today. PPFAS continues to invest with the same mindset, thoughtful stock selection, low churn, and a deep respect for long-term discipline. This article is not meant to promote the fund. It is simply an attempt to understand how a clear way of thinking has been carried forward. The philosophy that Parag Parikh practised and passed on still offers something useful to every investor. It shows that when you give decisions enough thought, when you stay with businesses you understand, and when you trust time to do its work, investing becomes a lot steadier. Note: We have relied on data from the annual reports throughout this article. For forecasting, we have used our assumptions. Parth Parikh currently heads the growth and content vertical at Finsire. He holds an FRM Charter along with an MBA in Finance from Narsee Monjee Institute of Management Studies. Disclosure: The writer and his dependents do not hold the stocks discussed in this article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
Mint
02-06-2025
- Business
- Mint
India must streamline rules for the institutional trustee industry
India's wealth management ecosystem is undergoing rapid transformation, with institutional trustees playing a pivotal role in safeguarding assets, enabling succession, and ensuring fiduciary compliance. Yet, the regulatory framework governing institutional trustees remains fragmented and outdated, exposing the system to significant risks. As the volume of wealth under institutional trusteeship soars—estimated in the range of tens of thousands of crores—there is a pressing need to establish robust, uniform regulations to protect all stakeholders and foster sustainable industry growth. Also Read: How PPFAS is trying to change wealth management with simple advice Institutional trustee services in the country are primarily governed by two main statutes: (i) The Indian Trusts Act, 1882, which provides the foundation for the creation, administration, and duties of trustees in private trusts; and (ii) SEBI (Debenture Trustee) Regulations, 1993, administered by the markets regulator, specifically governing debenture trustees. Despite these frameworks, there is no comprehensive, unified regulation or certification regime for all institutional trustees, especially those operating outside the debenture and securities space. This regulatory gap exposes the industry to inconsistencies and serious risks. Why institutionalization is the need of the hour Enhanced professional standards and accountability: Institutionalising the industry would introduce mandatory certification, training, and ongoing education, similar to how chartered accountants (CAs) are regulated by the Institute of Chartered Accountants of India (ICAI). CAs must pass rigorous exams, adhere to a code of ethics, and undergo regular peer reviews, ensuring high professional standards and accountability. This structure has led to greater public trust and fewer instances of malpractice in the accounting profession. Improved transparency and investor protection: A regulated institutional trustee industry would require robust disclosure norms, regular audits, and transparent reporting, reducing the risk of fraud, mismanagement, or conflicts of interest. As seen in the CA profession, regulatory oversight deters unethical behaviour and builds investor confidence. Uniformity in practices and reduced legal ambiguity: Currently, the lack of standardization leads to varying practices and legal uncertainties, particularly in private trusts and family offices. Regulation would harmonize procedures, documentation, and dispute resolution mechanisms, reducing litigation and confusion. Better risk management and systemic stability: With thousands of crores of wealth under trusteeship, unregulated practices pose systemic risks to the wealth management and financial services sectors. Regulation would enforce risk management protocols, capital adequacy norms, and contingency planning, safeguarding both beneficiaries and the broader economy. Also Read: Can this mid-cap company take the lead in the exploding $1.2 trillion wealth management business? Facilitated market growth and global competitiveness: A regulated and institutionalized trustee industry would attract more domestic and international capital, as investors prefer jurisdictions with clear rules and protections. This would enable Indian trustees to compete globally and foster innovation in trust structures and estate planning. International precedents: Lessons from abroad UK: The UK's trust industry is regulated by the Financial Conduct Authority (FCA), which mandates licensing, compliance, and anti-money laundering checks. This has resulted in a transparent, reliable, and globally respected trustee sector. Singapore: The Monetary Authority of Singapore (MAS) regulates trust companies, ensuring high standards of governance and investor protection. This has made Singapore a preferred hub for wealth management and family offices. US: Trust companies are state-licensed and subject to regular audits and capital requirements, ensuring safety and soundness for beneficiaries. In all these jurisdictions, regulation and oversight has benefited all stakeholders—trustees, beneficiaries, and the financial system—by reducing fraud, enhancing professionalism, and boosting investor confidence Risks of delayed action in India If India does not move swiftly to institutionalize and regulate its institutional trustee industry, the following risks loom large: Increased incidents of fraud and mismanagement: Without oversight, unscrupulous operators can exploit loopholes, leading to financial losses for beneficiaries and reputational damage to the industry. Legal and operational risks: Ambiguities in trustee duties and the lack of oversight can result in costly legal disputes, delays, and reputational damage. Loss of investor confidence: High-profile scandals or disputes could deter both domestic and foreign investors from using Indian trustee services. Regulatory arbitrage: Inconsistent rules could lead to regulatory arbitrage, where entities exploit gaps between different legal frameworks, undermining the integrity of the financial system. Systemic risk: The sheer quantum of wealth under trusteeship—estimated to be in the range of several lakh crores—means that failures could have ripple effects across the financial sector. Competitive disadvantage internationally: India may lose out on attracting global capital and trust business if it does not adopt internationally recognised governance standards. Also Read: Mastering wealth management: The role of psychology in decision making and financial success The institutional trustee industry in India stands at a crossroads. While there are a handful of institutional trustees currently operating per global best practices, several are not. To protect the vast wealth under their stewardship and to foster a robust, transparent, and globally competitive wealth management ecosystem, there is an urgent need to institutionalize and regulate trusteeship. Establishing a certification or regulatory body would professionalize the sector, protect stakeholders, and unlock long-term benefits for trustees, mirroring successful international models and established Indian professional bodies. Tanmay Patnaik is partner-private client practice at Trilegal.
Mint
22-05-2025
- Business
- Mint
5 timeless lessons from Parag Parikh's 'Stocks to Riches' on investor behaviour
First published in October 2005, Parag Parikh's ageless book, 'Stocks to Riches: Insights On Investor Behaviour', still remains a crucial read for both aspirational equity investors and investment professionals alike. Parag Parikh was a well renowned visionary investor in India. He was also a behavioural finance professional, author, and the founder of the Parag Parikh Financial Advisory Services (PPFAS) mutual fund. He was admired in the market circles for his deep and intense insights on human psychology and investing. Not only this he was an ardent follower of Warren Buffett and advocated long term value investing. His legacy lives on through his work and writings and the immense success of PPFAS mutual fund, which continues to uphold his investment philosophy. His book focuses on blending behavioural finance with practical equity market wisdom. It details how human psychology and biases influence investment decisions in the financial world. With decades of experience in well planned value investing, Parikh draws on real-life examples to spread awareness among investors against unproductive and flawed investment behaviour. Here are five core insights from the book that continue to hold immense value even in today's volatile markets: Parikh throws light on loss aversion as a key emotional trap. 'The pain of losing is psychologically about twice as powerful as the pleasure of gaining,' he elaborates. The objective of writing this is to explain why investors often sell winning stocks early and hold on to losing ones. This instinctive fear distorts prudent decision making and rational judgement. Hence, on the part of investors one should consistently review their portfolio objectively. Focus should be on building long term wealth and not on short term market fluctuations and swings. Wealth can only be built by maintaining calmness, long term vision and composure throughout the investment journey. Mental accounting simply refers to treating money differently based on its origin or purpose according to Parikh. He strongly warns against this bias stating that, "People invest bonus money more recklessly than salary savings because they see it as a windfall." Such practices can push investors to poorly thought-out and erratic financial decisions. Therefore, as an investor you should consolidate your funds and base investment decisions on clear financial goals. You should also be careful while spending apparently 'free' looking money such as a lottery win in a responsible manner as per your long term financial goals. Many investors are reluctant to sell underperforming stocks because they have already put money into it and are on the losing end, due to this they are unable to take fair calls in a short period of time. To deal with the same challenge, Parikh urges readers to 'ignore the past and evaluate the present potential.' This difficult to overcome behavioural bias keeps people tied to bad investments. The focus here is to exit loss making positions in stocks and mutual funds after carefully analysing their fundamentals. The book quite intensely discusses the perils of following and going with the crowd. 'Investors are often influenced by what others are doing rather than what they should be doing,' Parikh writes. This can result in the creation of asset bubbles and consequently result in panic selling. The dot com bubble of 2000-01 and the housing bubble of 2007-08 in the US are some of the most recent examples of the creation of asset bubbles. If not side-stepped efficiently, such bubbles can even result in epic wipe out of wealth. Parikh hence wants investors to carry out thorough research and avoid participating in such market bubbles to conserve wealth. Parikh firmly supports long-term value investing. He argues that short-term market movements often reflect emotion, not logic. 'Markets are driven by greed and fear, not by fundamentals.' This simply means that one should ignore temporary noise, market declines or fluctuations and invest in only those businesses that have sustainable value. This is the simplest way to build wealth on a long term basis. The focus at all times is on the power of compounding and investing in those businesses that have the potential to showcase solid results and strong earnings compounding. For more details on the same you can refer to the official link of the book: PPFAS Knowledge Centre – Book Section Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers should consult a qualified financial advisor before making any investment decisions.
Mint
01-05-2025
- Business
- Mint
Investment of ₹1 lakh in 2013 in THIS mutual fund would have grown to around 8 lakh now. Check how
It is not uncommon to examine the past returns of a scheme before you decide to invest in it. Typically, investors assess the historical returns of a mutual fund scheme across different time lines before deciding to invest in it. Here, we assess the past returns of Parag Parikh Flexi Cap Fund, which was launched on May 24, 2013. For the uninitiated, a flexi cap fund is the one where fund manager is free to determine the ratio of allocation to stocks across market capitalisation i.e., large cap, mid cap and small cap as long as total exposure to equity and equity related instruments is 65 percent or higher. Tenure ₹ 1 lakh becomes Return (%) 1 year ₹ 1.13 lakh 13.85 3 years ₹ 1.59 lakh 16.88 5 years ₹ 3.75 lakh 30.35 10 years ₹ 4.8 lakh 17.07 Since inception (May 24, 2013) ₹ 7.89 lakh 19.04 As we can see in the table above, if someone had invested ₹ one lakh in Parag Parikh Flexi Cap Fund one year ago, it would have grown to ₹ 1.13 lakh by growing at the rate of 13.85 percent. In three years, the investment of ₹ one lakh would have grown to ₹ 1.59 lakh by delivering a return of 16.88 per cent per annum. And if someone had invested ₹ 1 lakh five years ago, it would have grown to ₹ 3.75 lakh, thus delivering a return of 30.35 percent. In 10 years time, the same invesment of ₹ 1 lakh would have grown to ₹ 4.8 lakh, thus delivering a return of 17.07 percent. And if someone had invested ₹ one lakh at the time of scheme's launch in May 2013, the investment would have grown to ₹ 7.89 lakh, giving an annualised return of 19.04 percent. This 12-year-old scheme has a total asset size of ₹ 93,440 crore as on March 31, 2025, as per the information on PPFAS website. The benchmark index of the scheme is Nifty500. And the scheme is managed by Rajeev Thakkar, Raunak Onkar, Raj Mehta, Rukun Tarachandani and Mansi Kariya. Its constituent stocks include HDFC Bank, Bajaj Holdings and investment, Coal India, Power Grid Corporation, ICICI Bank, Kotak Mahindra, ITC and Maruti Suzuki. Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision. Visit here for all personal finance related updates. First Published: 1 May 2025, 01:55 PM IST
