Impact of Currency Fluctuations
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With Parag Parikh Flexi Cap’s heavy exposure to U.S. tech giants, how comfortable am I with currency volatility and foreign investment uncertainty due to the recent Iran-U.S. conflict? Should I stick with it, or would shifting towards India’s domestic mid- and small-cap rally better capture this growth phase?
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In this current scenario, it's about balancing safety with momentum. The US-Iran conflict initially resulted in a 13% decline in the market. However, the Nifty has recovered well recently as fears of higher oil prices have calmed down.
Parag Parikh Flexi Cap has about 12-15% of its investments in the US, which helps protect against currency loss. When the rupee falls during global issues, these US investments increase in value in INR, helping to keep your money safe.