Rajeev Thakkar, CIO of PPFAS Mutual Fund, reassures investors that recent underperformance is part of a long-term contrarian stance, as the fund adapts to evolving market conditions with increased cash positions and sector shifts.
Rajeev Thakkar, the chief investment officer at PPFAS Mutual Fund, has pushed back against criticism of the firm’s recent equity performance, arguing that a stretch of weak relative returns does not mean the underlying approach has broken down. In a note on August 4, Thakkar said Indian equities have been largely stuck in a broad range for about two years, a setting in which contrarian portfolios can lag for long periods before their holdings are recognised by the market.
His argument rests on the way PPFAS has long invested: by buying businesses or sectors that are out of favour rather than chasing what is already working. That can make performance look disappointing when benchmark-heavy names keep climbing and cheaper holdings remain ignored. Thakkar said such phases can last months or even longer, depending on when sentiment turns. He also rejected the idea that the fund’s recent softness is simply a function of scale, pointing to a sharper period of underperformance in 2007, when his portfolio management service handled just over ₹100 crore.
One sign of a changing backdrop is cash. According to NDTV Profit, the Parag Parikh Flexi Cap Fund lifted equity exposure to 80.39% in April from 77.34% in March, while cash fell to 15.51% from roughly 25%. That is still a cautious stance, but it suggests the fund is finding more areas where valuations look workable after the market correction seen in late 2024 and early 2025. The portfolio has continued to lean towards large-cap names in IT services, banking and defensive consumer stocks.
The managers have also been leaning into sectors many investors remain wary of. Business Standard reported in June that the $14.9 billion flexi cap fund had been building exposure to IT services over the previous three months as valuations cooled, despite fears that artificial intelligence could disrupt outsourcing demand. The fund has also added financials, utilities and coal mining, while Moneycontrol reported in December 2025 that it increased positions in ITC, banks, Amazon and Power Grid, even as it trimmed Infosys. Thakkar has said AI may remove some work but create demand in other areas such as cybersecurity, and he has argued that the fund is not built around fashionable themes.
That stance extends to private banks. Thakkar said PPFAS still holds four of them and does not see HDFC Bank’s problems as a threat to the lender’s franchise or customer base. More broadly, he has urged investors to stay patient, avoid excessive trading and sell only when fundamentals, valuation or circumstances clearly justify it. The message is that lower cash levels and fresh buying are signs of a gradual redeployment, not a promise of quick gains. Whether that positioning pays off will depend on execution, market conditions and how long investors are willing to wait.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
