PPFCF vs HDFC Flexi Cap Fund

From WebNotes, a public knowledge base. Last updated . Reading time ~14 min.

The Parag Parikh Flexi Cap Fund (PPFCF) and the HDFC Flexi Cap Fund are the two largest schemes in the flexi cap mutual fund category in India, between them accounting for a material share of the category’s industry-wide assets under management. Both schemes operate under the flexi cap categorisation created by SEBI in November 2020, which permits a fund to invest across large, mid, and small market-capitalisation segments without any minimum allocation constraint to any single segment, subject only to a minimum 65 per cent in equity and equity-related instruments. Despite operating under the same regulatory category, the two schemes differ materially in investment philosophy, portfolio construction, international allocation, fund manager tenure, distribution architecture, and the way each AMC interprets the flexi cap freedom.

The Parag Parikh Flexi Cap Fund is the flagship equity scheme of PPFAS Mutual Fund, a boutique asset management company set up by founder Parag Parikh in October 2012 and led after his death in May 2015 by his son Neil Parikh as Chairman and Chief Executive Officer. The scheme was launched on 24 May 2013 as the Parag Parikh Long Term Value Fund (PPLTVF), renamed to Parag Parikh Long Term Equity Fund in February 2018 following SEBI’s October 2017 scheme rationalisation circular, and renamed again on 13 January 2021 to the Parag Parikh Flexi Cap Fund. The full naming history is documented at the PPLTVF-PPLTEF-PPFCF rename history entry. The HDFC Flexi Cap Fund, managed by HDFC Mutual Fund, is one of the oldest equity mutual funds in India, originally launched in January 1995 as the HDFC Equity Fund and recategorised into the flexi cap category in January 2021.

The structural contrast between the two schemes is most clearly visible in three dimensions: international allocation, fund manager philosophy, and approach to portfolio construction. PPFCF can allocate up to 35 per cent of assets to overseas-listed equities under its Scheme Information Document and historically held around 28 per cent in foreign securities such as Alphabet Inc., Microsoft Corp, Amazon.com and Meta Platforms before the SEBI Mutual Fund overseas investment cap breach of February 2022 forced a freeze on incremental foreign investments. The HDFC Flexi Cap Fund is a domestic-only scheme, with no provision in its mandate for overseas equity exposure. PPFCF is built around the explicit PPFAS investment philosophy of value investing, margin of safety, behavioural finance, and tax-aware portfolio management. The HDFC Flexi Cap Fund is managed by Roshi Jain (since 2022) with a growth-at-reasonable-price orientation typical of the HDFC AMC stable.

This comparison covers AUM trajectory, portfolio construction, international allocation, fund management approach, fee structure, taxation, distribution, and recent developments at each scheme as of May 2026.

Comparison overview

DimensionParag Parikh Flexi Cap FundHDFC Flexi Cap Fund
AMCPPFAS Mutual FundHDFC Mutual Fund
Inception date24 May 20131 January 1995 (originally HDFC Equity)
SEBI categoryFlexi capFlexi cap
BenchmarkNifty 500 Total Return IndexNifty 500 TRI
AUM (May 2026)Approximately Rs 1,60,952 croreApproximately Rs 75,000 to 80,000 crore (HDFC range)
Overseas allocationUp to 35 per cent permitted; 11 to 16 per cent currentlyNil (domestic only)
Portfolio size25 to 37 stocks (focused)45 to 60 stocks (broader)
Lead fund managerRajeev Thakkar (since launch)Roshi Jain (since 2022)
Investment styleValue, behavioural, focusedGrowth-at-reasonable-price
Expense ratio (direct plan)Approximately 0.63 per centApproximately 0.75 per cent
Minimum investmentRs 1,000Rs 100

Assets under management trajectory

The PPFCF AUM trajectory has been documented at PPFCF AUM trajectory. As of 31 March 2025 the scheme stood at Rs 93,440.89 crore. In May 2025 the fund crossed Rs 1,00,000 crore (Rs 1 lakh crore) becoming the first actively managed equity mutual fund scheme in India to do so. As of 15 May 2026 the AUM stood at approximately Rs 1,60,952 crore. The growth has been driven by sustained net inflows through systematic investment plans (SIPs) and lump-sum contributions despite multiple periods of voluntary inflow restriction. The fund’s SIP book is one of the largest in the industry.

The HDFC Flexi Cap Fund, while smaller in absolute AUM at approximately Rs 75,000 to 80,000 crore as of early 2026, has a far longer history dating back to its launch in January 1995. The scheme has been one of HDFC AMC’s flagship equity offerings for more than three decades. HDFC Mutual Fund operates with a substantially larger overall AUM base (over Rs 8 lakh crore as of early 2026) but distributed across a wide range of equity, debt, and hybrid schemes.

The AUM contrast reflects the structural difference between the two AMCs. PPFAS Mutual Fund operates a deliberately compact scheme set of seven active schemes as of May 2026, with PPFCF accounting for the majority of the AMC’s total AUM. The PPFAS stance on not chasing AUM means that the AMC has historically refused to launch sectoral or thematic schemes purely for asset gathering. HDFC AMC operates one of the largest scheme sets in India with dozens of equity, debt and hybrid offerings, including separate large cap, mid cap, small cap, focused, value and ELSS schemes.

Overseas allocation difference

The most material structural difference between PPFCF and the HDFC Flexi Cap Fund is the overseas equity allocation. The PPFCF Scheme Information Document permits up to 35 per cent of net assets in overseas-listed equity, subject to maintenance of a minimum 65 per cent domestic equity allocation required for equity-oriented tax treatment under Section 112A. The doctrine of international diversification at PPFAS was articulated by Parag Parikh from inception of the scheme and continues to guide the fund’s positioning under Rajeev Thakkar and Raunak Onkar.

Historically the fund has held positions of more than 5 per cent each in Alphabet at PPFCF, Microsoft at PPFCF, Amazon at PPFCF and Meta Platforms at PPFCF. At its peak in early 2022 the foreign exposure was approximately 28 per cent of AUM. Following the SEBI MF overseas investment cap breach in February 2022, when the industry-wide USD 7 billion cap was reached, PPFCF suspended fresh lump-sum and SIP/STP registrations and stopped adding to foreign positions. As of May 2026 foreign exposure has compressed to approximately 11 to 16 per cent because the underlying AUM has roughly tripled while the dollar foreign book has remained essentially frozen.

The HDFC Flexi Cap Fund operates with a domestic-only mandate. The scheme’s overseas allocation is nil. For investors seeking foreign equity diversification within an Indian equity-oriented mutual fund wrapper, PPFCF remains structurally distinctive. Investors who already have international exposure through other vehicles (international Fund-of-Funds, GIFT City products, direct foreign brokerage accounts under the Liberalised Remittance Scheme) and who prefer a pure-India flexi cap exposure may prefer the HDFC Flexi Cap Fund.

Portfolio construction and concentration

PPFCF runs a focused portfolio of approximately 25 to 37 stocks across Indian and international holdings. The top 10 equity holdings typically account for 47 to 59 per cent of the portfolio. As of May 2026 the top three Indian holdings were HDFC Bank at PPFCF at 7.94 per cent, Power Grid Corporation of India at 6.99 per cent and Coal India at 5.95 per cent. Other recurring Indian holdings include ICICI Bank at PPFCF, Bajaj Holdings, Maruti Suzuki, Mahindra and Mahindra, Hero MotoCorp, Infosys, TCS, HCL Technologies, Persistent Systems, Cipla, Kotak Mahindra Bank, IPCA Laboratories and ICRA.

The HDFC Flexi Cap Fund holds a broader portfolio of approximately 45 to 60 stocks, with a relatively higher allocation to large-cap financials, energy and industrials. The top 10 holdings typically account for 50 to 55 per cent of the portfolio. The portfolio is more diversified at the security level but is concentrated by sector, with financials being a significant overweight.

The portfolio turnover ratio at PPFCF is consistently among the lowest in the flexi cap category, typically below 25 per cent annually, reflecting the PPFAS tax-aware portfolio management doctrine of deferring capital-gains realisation for unitholders. The HDFC Flexi Cap Fund operates with a moderately higher turnover, typically in the 30 to 50 per cent range.

Investment philosophy comparison

The PPFAS investment philosophy is explicitly value-oriented and draws from Benjamin Graham, Warren Buffett, Charlie Munger, and behavioural-finance thinkers Daniel Kahneman and Robert Shiller. The four key components are:

HDFC Mutual Fund operates under what may be described as a growth-at-reasonable-price framework with a focus on quality companies with strong return on equity and earnings growth. Roshi Jain, the lead fund manager since 2022, is associated with a quality-growth orientation. The HDFC AMC philosophy is articulated less explicitly than PPFAS’s but is observable through portfolio holdings and AMC commentary.

Fund manager track record

PPFCF has been managed since launch (24 May 2013) by Rajeev Thakkar as lead Chief Investment Officer (Equity) along with Raunak Onkar as co-fund manager. The continuity of fund management since launch is one of the longest among Indian flexi cap schemes. The investment team also includes Rukun Tarachandani (since March 2021) and debt fund managers Raj Mehta and Mansi Kariya.

The HDFC Flexi Cap Fund has had multiple fund manager changes over its three-decade history. Roshi Jain has been the lead fund manager since July 2022 after joining HDFC AMC from Franklin Templeton. Prior managers include Prashant Jain, who managed the scheme for nearly two decades and built much of the scheme’s long-term track record. The change in fund manager in 2022 represented a meaningful inflection point for the scheme.

Performance comparison

The PPFCF Regular Plan growth option has delivered a compound annual growth rate (CAGR) since inception (May 2013) of approximately 19.06 per cent versus a category average of 15.22 per cent and the Nifty 500 TRI at 12.4 per cent. The Direct Plan CAGR is higher because of the lower expense ratio.

The HDFC Flexi Cap Fund has delivered long-term CAGR in the 17 to 19 per cent range since inception (1995) over a much longer period that spans multiple market cycles, fund manager regimes, and category re-definitions. Over the past five years (2021 to 2026) the HDFC Flexi Cap Fund has delivered competitive returns that are broadly comparable to PPFCF.

Past performance is not indicative of future results, and the two schemes have delivered their returns under materially different exposure profiles (with PPFCF benefiting from the multi-year US technology rally to the extent of its overseas allocation, and HDFC Flexi Cap Fund benefiting from concentrated Indian financial-services positioning).

Expense ratio and costs

The PPFCF expense ratio as per the latest monthly factsheet is approximately 0.63 per cent for the Direct Plan and approximately 1.32 per cent for the Regular Plan. The HDFC Flexi Cap Fund expense ratio is approximately 0.75 per cent for the Direct Plan and approximately 1.45 per cent for the Regular Plan. The difference between Direct and Regular plans reflects the mutual fund trail commission paid to distributors in Regular plans (see regular vs direct plan mutual fund).

The expense ratio differential between PPFCF Direct and HDFC Flexi Cap Direct is approximately 12 basis points per annum, a meaningful but not decisive factor over long holding periods. The direct plan adoption in India has reduced costs for self-directed investors at both schemes.

Tax treatment

Both PPFCF and the HDFC Flexi Cap Fund are equity-oriented funds maintaining at least 65 per cent in Indian equity, qualifying for equity mutual fund taxation in India:

  • Short-term capital gains (holding period up to 12 months) taxed at 15 per cent plus surcharge and cess under Section 111A.
  • Long-term capital gains (holding period over 12 months) taxed at 10 per cent on gains exceeding Rs 1.25 lakh per annum under Section 112A, without indexation.

The tax treatment is identical between the two schemes. There is no differentiation between domestic and overseas equity within an equity-oriented mutual fund as long as the 65 per cent Indian equity threshold is met. This is one of the key reasons PPFCF retains its overseas exposure within the mutual fund wrapper rather than through a separate Fund-of-Fund vehicle, which would attract slab-rate taxation post the April 2023 Finance Act amendments to debt mutual fund taxation.

Distribution and platforms

PPFCF is distributed directly through the PPFAS SelfInvest web and mobile platform, and through industry utilities such as CAMS, MF Central, BSE StAR MF, MF Utility, and third-party platforms (Zerodha Coin, Groww, Kuvera, ET Money, Paytm Money, INDmoney, Upstox, Angel One, 5Paisa, mStock). The Direct Plan is bought without distributor intermediation.

The HDFC Flexi Cap Fund is distributed through HDFC AMC’s own platforms, HDFC Bank’s wealth channels, an extensive distributor network operating under the AMFI ARN registration framework, and the same set of third-party platforms. HDFC AMC has one of the largest distributor footprints in the industry.

Recent developments

Notable recent developments at PPFCF include the May 2025 crossing of Rs 1 lakh crore AUM, the launch in February 2024 of the Parag Parikh Dynamic Asset Allocation Fund, the launch in February 2026 of the Parag Parikh Large Cap Fund, and the continuing cash allocation of 18 to 25 per cent through 2026 reflecting the management’s assessment of equity valuations. The 12th Annual Unitholders’ Meet was held on 22 November 2025 at Birla Matushree Sabhaghar, Marine Lines, Mumbai (see PPFAS annual unitholders meet).

The HDFC Flexi Cap Fund under Roshi Jain has gradually repositioned the portfolio with somewhat higher mid-cap and consumer-discretionary exposure relative to the prior Prashant Jain regime.

Criticism and debates

Both schemes have attracted criticism in the financial press. PPFCF has been criticised for the high cash allocation in 2026 (with critics arguing that investors paying a flexi cap expense ratio should not have material allocations parked in cash), and for the AUM size (with critics arguing that the scheme is now too large to retain its focused portfolio and small-cap nimbleness). Rajeev Thakkar has addressed both concerns in monthly factsheet commentaries and unitholder meet presentations.

The HDFC Flexi Cap Fund attracted criticism during the 2019 to 2021 period under prior management for underperformance relative to peers, especially during the value-versus-growth rotation. Post 2022 the scheme has rebounded under Roshi Jain.

See also

External references

References

  1. PPFAS Mutual Fund factsheet for May 2026.
  2. SEBI circular SEBI/HO/IMD/DF3/CIR/P/2017/114 on scheme rationalisation.
  3. SEBI circular on Flexi Cap category creation, November 2020.
  4. AMFI monthly AUM data.
  5. PPFCF Scheme Information Document.
  6. HDFC Flexi Cap Fund Scheme Information Document.
  7. Value Research scheme pages for PPFCF and HDFC Flexi Cap Fund.

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed
Conflicts of interest
WebNotes is independent. No relationship with any broker, registrar or bank named in this article.