Axis Small Cap Fund

Diversified

Equity

India Micro Cap

Others

Small Cap

Aggressive growth Investor Profile

Investor Profile

1–7 yearsInvestment Horizon

HNI, UHNI, Retail Investor, Mass AffluentTarget Segments

SEBI registered equity mutual fund suitable for all investor categoriesRegulatory Fit

Axis Small Cap Fund Growth invests in smaller Indian companies for higher growth potential with higher risk.

What This Strategy Does

Axis Small Cap Fund Regular Growth is an equity small-cap fund which captures India's ₹10 trillion small-cap opportunity through a bottom-up stock selection approach, deploying capital across industrials, financials, and healthcare to achieve broad-based earnings growth.

CW Expert Research Notes

Resilient Downside Protection

The fund has demonstrated consistent downside protection across market cycles, outperforming its benchmark in 10 out of the past 12 years.

Differentiated Sector Positioning

The fund's sector allocation reflects a differentiated approach, with overweight positions in healthcare and industrials, and underweight exposure to energy and communication services compared to peers.

Valuation-Driven Opportunity Set

The fund's investment process focuses on identifying undervalued small-cap companies with potential catalysts for earnings revisions and structural tailwinds.

Performance and Risk Analysis

Historical returns, volatility patterns, and how this fund has performed relative to its benchmark.

Fund Performance

-0.7% AnnuallyAlpha

+17.4% vs +10.4% benchmarkSince Inception

+15.8% vs +7.4% benchmark3Y Annualized

+15.9% vs +8.8% benchmark5Y Annualized

Axis Small Cap Fund

Benchmark Index

Benchmark Performance Comparison

Axis Small Cap Fund

NIFTY 50

Risk Profile

Standard Deviation20.0%

Maximum Drawdown-18.9% | Oct 2024

Sharpe Ratio0.22

Beta0.78

Upside Capture77%

Detailed Risks

Market Risk

Prolonged economic slowdown could dampen consumer demand, impacting small-cap earnings.

Liquidity Risk

Volatility spikes or redemptions may impair small-cap liquidity, hindering rebalancing.

Concentration Risk

High mid-cap exposure amplifies risks from sector-specific headwinds or shocks.

Specific Strategy Risk

Regulatory changes targeting small-caps could disrupt growth or valuations.

Strategy Details

A closer look at the investment thesis, portfolio construction, and current holdings.

Core Investment Theme

Provides exposure to India's entrepreneurial energy before institutional capital discovers it. Small caps offer the highest growth potential but demand patience through volatility cycles. The long-term impact is dramatic wealth creation—historical data shows sustained small-cap investing has generated life-changing returns, but requires conviction to stay invested through sharp drawdowns. Suitable for investors with a high risk appetite and long investment horizon.

Broader Market View

Market Outlook

Equity markets appear to be entering a mid-cycle phase, with consumption and earnings recovery gaining traction. This normalization backdrop, supported by trends like reviving capex and credit growth, presents an opportune entry point. The strategy's tilt towards consumer, financial services, and technology positions it to capitalize on these dynamics while managing risks like competition and cyclicality.

Why This Strategy is Attractive Now

The strategy seems well-aligned with the current environment given its balanced exposure across consumer cyclicals, defensives, financials, and technology. The portfolio's diversification across around 70 holdings, including market leaders, could allow it to participate in the normalization upside while its moderate risk profile may provide resilience. This positioning differentiates it from benchmarks, potentially offering risk-adjusted returns.

Investment Style & Process

Investment Style

The portfolio exhibits characteristics of a Quality Growth strategy, emphasizing companies with durable competitive advantages, consistent earnings growth, and reasonable valuations across large and mid-cap market segments.

Why it Makes Sense

In the current environment of moderating economic growth and elevated uncertainty, a Quality Growth approach focused on companies with pricing power, recurring revenues, and strong balance sheets may provide a degree of defensiveness while participating in secular growth opportunities.

High-Level Investment Process

Sourcing: The strategy appears to source investment ideas through a combination of quantitative screening for quality metrics like high returns on capital, stable earnings, and low financial leverage, complemented by fundamental research into long-term competitive positioning and growth runways. Selection: The selection process suggests a preference for companies operating in sectors with attractive secular tailwinds, defensible business models, and the ability to compound shareholder value through a combination of revenue growth and prudent capital allocation. Construction: Portfolio construction is consistent with a multi-cap core approach, diversified across sectors and market capitalizations, while maintaining an overweight to quality growth companies relative to the broader market.

Portfolio Holdings Overview

SectoralAllocation

Capital Goods29.55%

Utilities0.94%

Financial Services18.99%

Services16.52%

Energy & Infra5.92%

Consumers19.24%

Technology8.84%

Geographic Allocation

Domestic100%

Top Stock Holdings

CompanySectorAllocation

Clearing Corporation Of India LtdUtilities11.75%

CCL Products (India) LtdConsumers3.00%

Krishna Institute of Medical Sciences LtdServices2.63%

J.B. Chemicals & Pharmaceuticals LtdServices2.58%

Multi Commodity Exchange of India LtdFinancial Services2.55%

Nifty April 2026 FutureUtilities2.00%

City Union Bank LtdFinancial Services1.98%

Blue Star LtdCapital Goods1.75%

Brigade Enterprises LtdEnergy & Infra1.67%

Cholamandalam Financial Holdings LtdFinancial Services1.58%

Fund House Management

The asset management company’s track record, AUM scale, and fund manager credentials.

Fund Manager Track Record

Tejas Sheth

Mr. Tejas Sheth has experience of 21 years. Manages 6 funds at Axis Asset Management Company Limited with an AUM of approximately ₹26,547 Cr Holds a PGDM degree.

26 years

Combined Team Experience

₹ 1,84,586 Cr

Assets Under Management

Mayank Hyanki

Co-Portfolio Manager

Mayank Hyanki has experience of 3 years. Manages 26 funds at Axis Asset Management Company Limited with an AUM of approximately ₹29,599 Cr

Krishnaa N

Co-Portfolio Manager

Krishnaa N has experience of 2 years. Manages 158 funds at Axis Asset Management Company Limited with an AUM of approximately ₹1,28,440 Cr

CW Expert Take

Axis Small Cap Fund operates with entrepreneurial agility despite institutional backing. Their investment philosophy emphasizes quality compounding in equities and prudent credit selection in debt. The fund house has built focused expertise rather than chasing asset gathering, resulting in concentrated portfolios with high-conviction ideas.

Firm Overview

Total AUM₹3,61,984.16 Cr

Investment Philosophy & Approach

Disciplined Approach

Axis AMC follows a disciplined investment approach focused on rigorous research.

Risk Management

Risk management is embedded in the investment process through robust frameworks.

Long-Term Mindset

The fund house maintains a long-term capital allocation mindset.

Operational & Regulatory Details

What it costs to invest, transaction mechanics, and regulatory disclosures you should know.

Costs and Fees

Total Expense Ratio (TER)1.74%

Exit Load1

Regulatory & Tax Information

INF846K01K01

ISIN

DailyDealing Frequency

Nifty Smallcap 250 TR INRBenchmark

LTCG | >1Year 12.5%% on gain above 1.25 Lakh

STCG | <1Year 20%%

Tax Implications (India)