My First SIP Investment: Axis Small-Cap Mutual Fund and My Journey with Mutual Funds
Investing through Systematic Investment Plans (SIP) has always been an integral part of my financial strategy. Among all the funds I've invested in, my first SIP was in the Axios Small-Cap Mutual Fund. This choice, driven by multiple reasons, has shaped my path in the world of mutual funds.
Understanding Axis Small-Cap Mutual Fund
The first mutual fund that I invested in is the Axis Small-Cap Mutual Fund, a fund that has always stayed with me due to its unique advantages. Let's delve into the reasons behind this choice and how it has evolved over the years.
High Volatility and High Return Potential
The first reason for choosing the Axis Small-Cap Mutual Fund is its status as a small-cap fund. Small-cap funds are highly volatile, offering the potential for high returns, but also with an elevated risk factor. However, studies show that small-cap funds can outperform the NIFTY 50 index, which is often considered a benchmark for the Indian equity market. My interest in investing in such a fund was driven by this prospect.
Small-cap funds represent companies with a market capitalization between Rs. 850 crores and Rs. 22,000 crores. These companies may not have the same level of brand recognition or financial stability as large-cap firms, but they are more dynamic and have the potential for high growth.
Rationale Behind the Decision
There are several reasons that motivated me to select the Axis Small-Cap Mutual Fund for my SIP investment:
Reason 1: Small-Scale Fund Characteristics
Small-cap funds tend to be more volatile due to their smaller market capitalization. However, they also offer the potential for high returns, making them an attractive option for investors looking for long-term growth. Since my investment timeline was well over 30 years, I was willing to take on some risk in the initial stages of my financial journey.
Reason 2: Affordable SIP Amount
A major consideration for me was the affordability of the SIP amount. Axis Small-Cap Mutual Fund allows for starting your SIP with as little as Rs 100. This small investment enabled me to start my journey in a relatively low-risk manner, while still allowing for potential high returns in the long run.
Reason 3: Patience and Growth Potential
Lastly, although I was willing to take on risk, my investment horizon was long term. I saw the Axis Small-Cap Mutual Fund as a starting point for a journey of learning and growth. Over the years, I have come to realize the exponential growth potential of small-cap funds, and this initial SIP investment set the stage for my future financial success.
Personal Experience and Returns
My journey with the Axis Small-Cap Mutual Fund has been anything but ordinary. I also invested in Quant Kotak, another small-cap fund that allowed me to take an active role in understanding financial markets and mutual fund movements. This decision to invest has been both enlightening and rewarding, as I have seen satisfactory returns over the years, which have contributed to my financial growth.
In conclusion, the Axis Small-Cap Mutual Fund was a strategic choice that has greatly influenced my overall investment philosophy. By understanding the unique characteristics of small-cap funds, such as their volatility and potential for outsized returns, and by starting with a low SIP amount, I was able to build a foundation for a successful financial journey.
Should you be considering starting your own SIP journey or looking for ways to diversify your investments, the Axis Small-Cap Mutual Fund or similar small-cap funds may be worth exploring.