Parag Parikh Financial Advisory Services Ltd. (PPFAS) Mutual Fund, a SEBI registered portfolio management service provider, has drawn up a road map to reduce its expense ratio for the benefit of equity investors, said a top executive.
“Right now, we have assets under management (AUM) of about ₹980 crore,” said Neil Parikh, chairman and CEO, PPFAS. “This will touch ₹1,000 crore shortly. When it happens, our expense ratio will come down, eventually benefiting the investors.”
Currently, the expense ratio, inclusive of Goods and Services Tax (GST), stands at 1.99% for direct funds and 2.56% for regular funds. He expected it to come down to 1.50% for direct funds and 2% for regular funds soon.
Expense ratio is the annual fee paid by the investors towards the fund for meeting administrative, management, advertising, operating and other expenditure.
“Currently, we are not either in the top or bottom list in the expense ratio. We are focused on improving our AUM so that our expense ratio will be better and somewhere in between as compared with our peers,” he said.
Since inception, PPFAS operates only one scheme – flagship Parag Parikh Long Term Value Fund. It has posted a compounded annual growth rate (CAGR) of 20.09%, compared to 15.69% return by the benchmark Nifty 500, 12.58% by Nifty 50 and 12.19% by Sensex over the same period, he said.
To increase its focus on digitisation, PPFAS will soon roll out ‘Self Invest’ a mobile application, followed by web-app. PPFAS is also expanding its distribution network from 1,250 to 2,000. At the beginning, the contribution from distributors was 3% and it increased to around 15%. This would increase to 20-25% during 2018, he said.
“We are operating only one scheme, so that we don’t confuse investors with many offerings. On the anvil is the roll out of liquid fund followed by equity linked savings scheme,” Mr. Parikh said.
