Axis Small Cap Fund is a scheme predominantly investing in small-cap stocks. It is highly risky compared to other types, such as large equity funds. In a financial market where small-cap stocks are badly engulfed (S&P BSE Smallcap is down nine percent), Axis Small Cap Fund has generated returns of around 22 percent over the previous year ended 13 November 2019,
According to available statistics
During this time, the majority of small-cap category funds are in negative territory. The average return of funds in this category has been around minus 2 percent in the last year.
Axis Small Cap Fund Fund Manager Anupam Tiwari, who has run the fund since October 2016, says the fund’s outperformance can be linked to the stock selection strategy.
According to fund manager Mr. Tiwari, these sectors IT, Chemicals, and Financial have done well for the fund. According to him, they select stocks that look at four parameters:
- Good corporate governance
- Business quality
- Favorable business cycle
They avoid entirely businesses with poor corporate governance and who do not demonstrate the ability or intent to grow the business. Axis Small Cap Fund looks suitable for scalable and niche companies and prefers debt-free balance sheets. Valuation is less critical for small caps than other factors. Yet in this plan to buy stocks at a reasonable price and usually to keep them for an extended period.
The fund’s portfolio looks slightly limited relative to some of its competitors, with 37 stocks. That may show the high confidence of the fund manager, but such a strategy can affect the performance of the fund during a downturn on the market, especially in the case of small-cap stocks.
Axis Small Cap Fund Direct-Growth is an equity mutual fund scheme from Axis mutual funds. The scheme was launched on 29 November 2013 and is currently operated by its fund manager Anupam Tiwari. It has an AUM of ₹2,084.44 crore, and the latest NAV is ₹37.720 as of 14 Feb 2020.
Axis small-cap fund direct growth fund details:
- Category Equity: Small Cap
- Asset Under Management-₹2,084.44 Cr
- Expense Ratio-1.98%
- Fund Manager-Anupam Tiwari
- Minimum investment – Rs. 5,000.00
- Launch Date- 29 Nov 2013
- Fund Type- Open-End
Axis small-cap fund direct growth fund %
- 87.54% investment in Indian stocks
- 14.28% is in mid-cap stocks
- 66.99% in small-cap stocks
Axis Small Cap Fund Direct-Growth scheme return performance
- 38.83% in one year
- 58.42% in last three years
- 276.82% since the scheme launch
- The SIP amount to invest- ₹1000
Axis small-cap fund direct growth fund – Exit load information
If you redeem units before one year, 1% Exit loads for remaining investments and nil for 10% of investments.
If you redeem units after one year, then the exit load is Nil.
Applicability of investing in Axis Small-Cap Fund Direct-Growth Fund
Investors who want to invest money for at least 3-4 years and are looking for very high returns. Also, these investors should also be prepared for the possibility of higher losses in their investments.
When you invest for seven years or longer, you can expect gains that beat the inflation rate comfortably and are higher than fixed income options.
It is a fund that invests in small companies. When stock prices fall, such funds tend to fall more than those investing in large companies. So you can expect higher-term returns, but more severe fluctuations along the way.
As you do with all equity funds, you only have to invest through the SIP path.
See historical returns before investing
If you have been investing for many years in the future, it is also essential to look at long-term returns in the past. Look at historical returns, and evaluate the fund’s returns over at least five years to see the fund’s success in market cycles. Apart from this, experts say, returns should not be considered when choosing funds to invest. Besides, portfolio characteristics such as concentration and evaluation potential should be tested, experts say.
If an investor wants to invest in a fund, he should not take into consideration the individual returns and also look at the fund’s portfolio. The current portfolio valuation of the Axis Small Cap Fund is higher than its peers. If it is going to be the only small-cap fund in an investor’s portfolio, it is better to add another fund to balance the risk with a relatively low valuation.
Conclusion: If you are holding any small-cap fund, it means that you are ready to take a high risk with a long-term investment horizon. As long as you invest in small-cap funds, there will be a profit when you do proper research.