Fund of Fortnight
Ratin DSIJ / 19 Feb 2026 / Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Fund of Fortnight, MF - DSIJ Recommendation, Mutual Fund
Every fortnight, we recommend one open-ended equity diversified fund that has the best potential of returns for the next one year considering its constituents remain the same.
Every fortnight, we recommend one open-ended equity diversified fund that has the best potential of returns for the next one year considering its constituents remain the same.[EasyDNNnews:PaidContentStart]
Reason for recommendation
Flexi cap funds can help in volatile markets because they let the fund manager shift across market caps as leadership changes. When uncertainty rises, the portfolio can lean on large caps; when the cycle improves, it can add growth pockets, reducing the urge to time the market. Hence, our choice of MF Select this time is Parag Parikh Flexi Cap Fund.
On returns, the fund has been weak over the last 1 year, delivering 6.40 per cent versus the category average of 14.35 per cent. Over 2 years, it is ahead at 10.19 per cent versus 9.32 per cent. The outperformance widens over longer durations: 3 years, 19.36 per cent versus 16.76 per cent; 4 years, 14.44 per cent versus 12.70 per cent; 5 years, 17.12 per cent versus 13.34 per cent; 7 years, 19.73 per cent versus 14.69 per cent; and 10 years, 18.42 per cent versus 14.08 per cent. This suggests recent softness, but stronger long-term compounding versus peers.
Sector positioning shows a tilt towards Financials at 26.05 per cent, supported by Services at 10.76 per cent and Technology at 9.13 per cent. Cyclical exposure is present through Automobile at 7.42 per cent and Energy at 6.90 per cent, which can help in an upcycle but adds sensitivity in risk-off phases. The top five stocks together are about 29 per cent, pointing to a portfolio that is not overly concentrated. Within the category risk stack, Parag Parikh Flexi Cap Fund stands out with low volatility (standard deviation 8.28), lower market sensitivity (beta 0.59) and the best risk-adjusted score (Sharpe 1.59).
Top holdings include HDFC Bank (8.04 per cent), Power Grid (6.00 per cent), Coal India (5.26 per cent), ITC (5.05 per cent) and ICICI Bank (4.99 per cent). Overall, this fund suits investors with moderate risk and an investment horizon of 5 to 10 years, who can stay invested through short-term underperformance and want a flexi cap with a strong longer duration record.
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