Axis Small Cap Fund: Smart Investing Strategies For Beginners

Axis Small Cap Fund is a mutual fund scheme launched by Axis Mutual Fund in 2009. The fund seeks to generate long-term capital appreciation from a diversified portfolio of equity and equity-related instruments of small-cap companies. With an asset under management (AUM) of ₹2,92,314 Cr as of 10 October 2024, the fund has delivered average annual returns of 26.02% since its inception. The minimum SIP investment amount is ₹100, and the expense ratio is 0.54%. The fund has a very high-risk rating and is suitable for investors with a minimum investment horizon of 5-7 years.

How to invest in Axis Small Cap Fund

Investing in the Axis Small Cap Fund can be done directly from the website of the fund house, Axis Mutual Fund. You can also invest through platforms like MF Central and MF Utility. If you are uncomfortable with investing online, you can seek help from a mutual fund distributor, such as your bank.

The minimum SIP amount for the Axis Small Cap Fund is ₹100, and you can increase this in multiples of ₹100. If you want to invest a lump sum, the minimum amount is ₹5000.

The fund has an expense ratio of 0.54%, which is close to what most other Small Cap funds charge. The scheme seeks to generate long-term capital appreciation from a diversified portfolio of equity & equity-related instruments of small-cap companies.

The latest NAV or Net Asset Value of the Axis Small Cap Fund as of 10 Oct 2024 is 123.6. The total AUM or Asset Under Management as of this date is ₹2,92,314 Cr.

Axis Small Cap Fund's investment objective

Axis Small Cap Fund is a mutual fund scheme launched by Axis Mutual Fund in 2009. The fund seeks to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related instruments of small-cap companies.

Small-cap funds invest in the smallest companies listed on the stock exchanges. These companies are typically early in their growth cycle and offer high growth potential, but this comes with a high level of uncertainty as the business is not yet proven. As a result, price fluctuations in the stocks of these companies can be high, leading to significant NAV fluctuations for the funds.

Axis Small Cap Fund has delivered average annual returns of 26.02% since its inception and has doubled the money invested every three years. The fund has an asset under management (AUM) of ₹2,92,314 Cr as of 10 October 2024. The minimum SIP investment is set to ₹100, while the minimum lumpsum investment is ₹100. The fund's expense ratio is 0.54%.

The fund's portfolio is largely conservative, with holdings mostly in large-cap stocks and debt instruments. As of 31 July 2023, 89.64% was invested in equity, 9.99% in debt, and 0.37% in cash and cash equivalents.

Axis Small Cap Fund is suitable for investors with an investment horizon of at least 3-4 years who are seeking very high returns and are comfortable with the possibility of higher losses.

Axis Small Cap Fund's performance

Axis Small Cap Fund is a mutual fund scheme from Axis Mutual Fund that seeks to generate long-term capital appreciation from a diversified portfolio of predominantly equity & equity-related instruments of small-cap companies. The fund was launched on 11 November 2013 and has been in existence for 10 years and 11 months.

Performance

Axis Small Cap Fund has delivered average annual returns of 26.02% since its inception. The fund has doubled the money invested in it every three years. Its one-year returns as of 30 September 2024 are 39.96%. The fund's total return over a given period has been higher than the category average by 2.41%. However, its annualised returns for the past 1 year, 3 years, and 5 years have been lower than the category average.

The fund's performance in terms of generating consistent returns is in line with most funds in its category, and its ability to control losses in a falling market is above average. The fund's performance has been rated as 'below average' among its peers.

Axis Small Cap Fund has generated the highest return among small-cap funds in the last 10 years. For every unit of risk, the fund produces 20% more returns. However, it ranks lower in terms of generating consistent returns within its category.

Risk

Axis Small Cap Fund has been rated as a Very High Risk fund. It has a high expense ratio of 1.61% for the regular plan and 0.54% for the direct plan, which is close to what most other small-cap funds charge. The fund invests in smaller companies, and compared to those that invest in larger companies, such funds tend to fall more when stock prices fall. Therefore, while you can expect higher returns in the long term, there will be more severe ups and downs along the way.

Investment

The minimum SIP amount for Axis Small Cap Fund is ₹100, and you can increase this in multiples of ₹100. The minimum lump sum investment is ₹5000. The fund is suitable for investors with a minimum investment horizon of 5-7 years.

Portfolio

As of 31 July 2023, Axis Small Cap Fund had invested 89.64% in equity, 9.99% in debt, and 0.37% in cash and cash equivalents. The fund's portfolio is largely conservative, with most holdings in large-cap stocks and debt instruments. The top holdings of the fund include Brigade Enterprises Ltd., Cholamandalam Financial Holdings Ltd., Krishna Institute of Medical Sciences Ltd., and Kaynes Technology India Ltd.

Axis Small Cap Fund's risk analysis

Axis Small Cap Fund is a mutual fund scheme launched by Axis Mutual Fund in September 2009. The fund seeks to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related instruments of small-cap companies.

Risk Analysis

Axis Small Cap Fund is rated as a "Very High Risk" fund by SEBI's Riskometer. This is due to the nature of small-cap funds, which tend to fall more when stock prices decline compared to funds that invest in larger companies. As a result, while higher returns can be expected in the long term, there will be more severe fluctuations along the way.

The fund has no lock-in period, but investors are warned not to invest in this or any other small-cap fund if they need to redeem their investment in less than seven years. The fund has an exit load of 1% for investments beyond 10% if redeemed within 12 months.

The fund's performance has been mixed, with 10-year annualised returns higher than the category average by 2.41%, but consistently lower annualised returns than the category average for the past 1, 3, and 5 years. The fund's ability to deliver consistent returns is in line with most funds in its category, and its ability to control losses in a falling market is above average.

The fund's portfolio is largely conservative, with most holdings in Large Cap stocks and debt instruments. As of August 31, 2024, the fund had invested 89.34% in equity, 10.52% in debt, and 0.14% in other instruments. The fund's top holdings include Brigade Enterprises Ltd., Cholamandalam Financial Holdings Ltd., and Krishna Institute of Medical Sciences Ltd.

In terms of risk and return ratios, the fund has underperformed at beating its benchmark, with a poor risk-adjusted return. It has a lower sensitivity to market ups and downs and a more volatile performance compared to other funds in its category.

Axis Small Cap Fund's portfolio analysis

Axis Small Cap Fund is a mutual fund scheme launched by Axis Mutual Fund in 2009. The fund seeks to generate long-term capital appreciation from a diversified portfolio of equity and equity-related instruments of small-cap companies.

The fund's portfolio is largely conservative, with most holdings in large-cap stocks and debt instruments. As of 31 July 2023, the fund had invested 89.64% in equity, 9.99% in debt, and 0.37% in cash and cash equivalents.

The top holdings of the fund include Brigade Enterprises Ltd., Cholamandalam Financial Holdings Ltd., Krishna Institute of Medical Sciences Ltd., Kaynes Technology India Ltd., and CCL Products (India) Ltd. The fund has primarily invested in the consumer discretionary, financial, capital goods, healthcare, and construction sectors.

The Axis Small Cap Fund has delivered average annual returns of 26.02% since its inception and has doubled the money invested every three years. The fund has a minimum SIP amount of ₹100 and a minimum lumpsum investment of ₹1000. The expense ratio of the fund is 0.54%.

Frequently asked questions