If you intend to make investments over the long term, small-cap funds can be a part of your mutual fund portfolio. At least 65% of a small-cap fund’s stocks are small-cap companies.
Today, we will talk about the Axis Small Cap Fund. This fund has ₹22,262 Crores worth of assets under management (AUM) as of 30th June, 2024 and is a medium-sized fund. Here’s everything you need to know about the Axis Small Cap Fund, one of the small-cap funds that has exceeded investors’ expectations and produced exceptional results in the past few years!
Axis Small Cap Fund Performance
For many years, Axis Mutual Fund was distinguished by its growth-oriented approach, which involved investing in rapidly expanding businesses at a premium. The fund continuously beat its competitors and moved to the top. However, when value investing reappeared in the post-COVID world, Axis MF found it challenging to adjust, which led to a glaring underperformance.
Tables Showing Under Performance:
| Small Cap Funds | AUM (Rs crore) | Average 1-Year Rolling Return | Return (%) 5 yrs |
| Axis Small Cap Fund | 17,915.70 | 16.59 | 25.97 |
| DSP Small Cap Fund | 13,094.60 | 17.51 | 24.91 |
| HDFC Small Cap Fund | 25,409.00 | 27.82 | 22.08 |
| Nippon India Small Cap Fund | 41,018.80 | 25.53 | 28.49 |
According to data, 2.79% of the fund’s 92.77% domestic equity investment is in large-cap stocks, 3.97% is in mid-cap stocks, and 56.24% is in small-cap stocks. 0.72% of the fund’s assets are in debt, with 0.72% of those being in government securities.
As per the above table, if we compare Axis Small Cap fund with its peer, in 1 year, it has given a 16.59% return, which is the lowest. However, the same fund comes second if we compare the 5-year return. If we compare the Axis Small Cap fund with its benchmark, which is the Nifty Small Cap 250, as of April 2024, the fund has yielded only 3.38% against 7.20%.
This showcases that at present, in the short-term, Axis Small Cap Fund is underperforming. However, it has long-term potential.
Is Axis Mutual Fund a Good Investment?
Axis Mutual Fund is a well-known participant in India’s mutual fund market, renowned for its wide selection of schemes and solid performance. Although historical performance does not guarantee future outcomes, Axis has produced excellent returns time and time again in a variety of market circumstances.
Equity mutual funds, out of all the many MFs, usually give investors competitive returns. Prospective investors have many options for choosing the finest Axis mutual funds, depending on their investing goals and risk tolerance. These comprise, among others, small-cap funds, mid-cap funds, large-cap funds, and large and mid-cap funds.
Essential things to consider while investing include your financial objectives, the fund’s investment strategy, and the fund manager’s experience are the basic needs. You should also consider your risk tolerance.
Also, while investing in small-cap funds, it is important to invest only if you have a time horizon of seven years or more.
Conclusion
The performance of Axis Small Cap Fund has been volatile. Although it did well in the growth-oriented market in the long term, it found it difficult to adjust to the value-driven environment that followed. Before investing in Axis Small Cap Fund, investors should carefully consider their investment horizon and risk tolerance. Maintaining asset class and fund diversification is also crucial for controlling investment risk.
