Parag Parikh Long Term Equity Fund is an open ended Mutual Fund. As the name indicates, it is an Equity Fund, that invests in stocks of companies of all sizes and capitalizations. It is a Multi Cap Fund with the objective of capital appreciation. As it invests in equities and equity related instruments pan capitalizations across the market, it offers diverse portfolio and risk management.
Managed by three Fund Managers, Rajeev Thakkar, Raunak Onkar and Raj Mehta look after domestic components of equities, foreign investments and fixed income investment portion respectively. The fund is not only unbounded by market capitalization but also not limited to sectors or geographical boundaries, as they claim ‘not restricted by self-imposed limitations’. However, 65% of the corpus is invested in listed Indian equities.
Who should Invest
- Investors with a long term horizon should go for this fund. They clearly state that early gratification has its own perils and so an investor should invest at least for 5 years and not redeem the scheme any earlier
- If you are seeking capital generation then you may try this fund for investment. It is not for a short term purpose to provide a source of income if you expect regular dividends from returns. It offers Growth option and not the Dividend option
- If you are unable to decide to invest in which particular market cap then you can invest in this fund where it depends entirely on the Fund Manager and it is reshuffled as per market needs
- If you are looking for a portfolio diversification across various caps and sectors
- It is for moderate high risk tolerant investors
Equity Funds do not offer guaranteed returns as they are market volatile. Multi Cap Funds may give good returns if the investment mandate goes right. The small and mid cap stocks should realize its value with time. If these stocks fail to give returns, the investor’s portfolio may show negative returns. It may or may not be balanced out with relevant exposure to large cap shares and other assets. Thus, it is a moderately high risk mutual fund.
Also Read: Best Multi Cap Funds
Will You Pay Tax?
If you withdraw or redeem the units before one year of investment, Short Term Capital Gains Tax of 15% is levied. Whereas, Long Term Capital Gains Tax above ₹1 lakh will be taxed at 10% after completion of 1 year of investment.
Suppose an investor has made a capital gain of ₹1.5 lakh on investment in this scheme, and withdraws the amount after 1 year of investment, Long Term Capital Gains Tax of 10% would be levied on ₹50,000. ₹1Lakh is exempted from taxation. The payable tax would be ₹5,000.
How to Invest in Parag Parikh Long Term Equity Fund
- Sign Up/Sign In to Paisabazaar.com and go to ‘Direct Mutual Funds’
- Click on the section of ‘Multi Cap Funds’
- Type and search directly by the name of Parag Parikh Long Term Equity Fund. Once it opens up, look at the details. You can also compare similar funds as well as use Returns Calculator
- Click on ‘Invest Now’, select either Lump sum or SIP
Why Should you choose Paisabazaar
- Trusted website, no commission charges and no paperwork
- You can compare more than 1,700 Funds at one platform instead of visiting the website of each AMC and then searching for numerous funds
- Easy to browse as Funds are segregated under Equity, Debt, Large Cap, ELSS, etc. You can further add filters of ratings, returns, fund houses
- Important scheme details such as latest Net Asset Value (NAV), Expense Ratio, Assets Under Management (AUM), etc are also available on the portal, making it easier for consumers to pick a suitable fund
Frequently Asked Questions (FAQs)
Q. What is the Exit Load for this scheme?
Ans. If an investor redeems the purchased units within 1 year/365 days of allotment of units, an Exit Load of 2% is payable by the investor. Unlike many Equity Funds that have zero Exit Load for redemption after 1 year, Parag Parikh Long Term Equity Fund charges 1% post 1 year and before 2 years i.e. between 366 to 730 days. After 2 years, there is no Exit Load.
Q. Is it beneficial to invest via open-ended (lumpsum) or SIP?
Ans. SIP (Systematic Investment Plan) is considered an efficient and convenient mode of investment that is beneficial in the long term investment. It also reduces financial burden as one needs to invest periodically and provides the benefit of rupee averaging cost.
Q. What is the entry load for this fund?
Ans. There is no applicable entry load on the aforementioned fund.
Q. Is there any lock-in period for investment in this scheme?
Ans. No. Investors can redeem their investment as per their wish and needs.
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