Choosing a small-cap fund is a difficult decision in itself. You don't have to invest everything in it and expect high returns. When it is much more prudent to balance a portfolio than to put all the eggs in one basket.
Axis Small Cap Fund is an equity fund. It falls under the 'small-cap,' where the portfolio invests in small-cap enterprise shares. This is highly risky compared to other types, such as significant equity funds. However, they are more likely to return due to the high risk.
- Investing in Axis Small-Cap Fund Direct is a wise decision, and the investment has many benefits.
- This type of fund is ideal for high-risk investors, long-term goals, and long-term investments.
- Axis Small Cap Funds have given excellent results in the last three years in their category.
On a long-term basis, all small-cap funds perform equally with minimal inequality. While Axis small-cap fund direct may have achieved better returns in the last 1-2 years, HDFC Small Cap has given better returns over the previous three years and Reliance Small Cap in the last 5 years. Based on past performance, you should get good returns around 15% -17% on average.
It is ideal for long-term investors.
The Axis Small Cap Fund Direct-Growth is a small-cap equity fund that invests 81.88 percent in Indian stocks, 13.69 percent in mid-cap stocks, and 62.83 percent in small-cap stocks. It is best suited for long-term investors.
- This fund invests in small market capitalization companies. Small-cap funds invest in small-market capital companies, which are growing businesses or startups. While these businesses have great potential for future growth and can achieve good returns on investment, they also have high volatility in returns.
- Minimize the impact of market volatility on your returns - Investors planning to invest in small-cap funds or if they are already investors in small-cap funds are also advised to continue their investments for about five years. The investment will enable you to reduce the market impact. Helps you reduce the effect of market volatility on your returns, the more you invest in the equity market, the more likely you are to earn good profits.
- Invest for long-term goals - For long-term goals such as higher education for children, retirement plans, and approving mid-term loans, a small-cap fund has to be chosen. To reduce the risk, you can invest in a small-cap fund in SIP mode for 7-10 years.
- Provide better returns - The returns for a year are around 8.6 percent, which is very good, given the volatile market, and the returns are better than bank FDs.
Conclusion:
If you are choosing any small-cap fund, then you are ready to take a high risk with a long-term investment horizon. As long as you invest in small-cap funds, doing proper research would help.
