Compare SBI Small Cap Fund and Axis Small Cap Fund 2025 — returns, risk, fund manager & performance. Find out which small-cap fund is best for your SIP.
Introduction
Small-cap mutual funds are one of the most exciting options for investors who want to build long-term wealth. These funds invest in smaller companies that have strong potential to grow faster than large businesses.
In India, SBI Small Cap Fund and Axis Small Cap Fund are two of the most popular small-cap funds. Both have delivered great returns and are loved by investors who want to grow wealth through SIPs.
But the big question remains — SBI Small Cap Fund vs Axis Small Cap Fund: which one is better to invest in 2025?
In this article, you’ll learn about their performance, risk level, fund manager style, and returns — all explained simply so that even a beginner can decide easily.
Looking to start your SIP? Check out our detailed list of 10 Best Mutual Funds 2025 to Start SIP and pick the right one for your goals!
What Are Small Cap Mutual Funds?
Before we compare SBI Small Cap Fund vs Axis Small Cap Fund, let’s understand what small-cap funds are.
Small-cap mutual funds invest at least 65% of their money in small companies ranked below the top 250 by market value. These are businesses that can grow very fast, giving high returns to investors.
However, this growth also comes with high risk. The share prices of small-cap companies can fluctuate a lot in the short term.
That’s why experts suggest investing in small-cap funds only if you can stay invested for 7–10 years and can handle market ups and downs.
Want safer options? Check out why Nifty 50 Index Funds are among the most trusted choices for stable investors.
SBI Small Cap Fund: Overview & Analysis
About the Fund
Launched in 2013, the SBI Small Cap Fund is one of India’s most popular small-cap mutual funds. It is managed by Mr. R. Srinivasan, who is known for his research-based and disciplined investing style.
This fund mainly invests in small companies that are fundamentally strong, have stable management, and the potential to become future leaders.
Key Features
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Launch Year: 2013
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Fund Manager: R. Srinivasan
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Expense Ratio: Around 0.75% (Direct Plan)
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AUM: ₹30,000+ Crore
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Minimum SIP Amount: ₹500
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Benchmark: S&P BSE Small Cap Index
Performance
The SBI Small Cap Fund has delivered over 20% CAGR in the last 10 years — making it one of the best-performing funds in India.
Even though the short-term performance may fluctuate, it has consistently outperformed its benchmark index over the long term.
Drawbacks
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High volatility during market corrections
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Temporary restrictions on new investments when fund size grows too large
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Slight underperformance in recent years due to market shift toward mid-caps
Axis Small Cap Fund: Overview & Analysis
About the Fund
The Axis Small Cap Fund, also launched in 2013, is managed by Mr. Shreyash Devalkar. The fund has gained investor trust due to its focus on quality and well-managed small companies.
This fund follows a more conservative approach compared to SBI’s fund — it prefers companies with stable financials and long-term business growth.
Key Features
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Launch Year: 2013
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Fund Manager: Shreyash Devalkar
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Expense Ratio: Around 0.60% (Direct Plan)
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AUM: ₹20,000+ Crore
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Minimum SIP Amount: ₹500
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Benchmark: Nifty Smallcap 250 Index
Performance
The Axis Small Cap Fund has generated 18–20% annualized returns in the past 5 years.
It has shown smoother performance with less volatility than other small-cap funds, thanks to its focus on quality stocks.
Drawbacks
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Conservative approach may reduce upside during bull markets
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Slightly lower long-term returns than SBI Small Cap Fund
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Can underperform during strong market rallies
SBI Small Cap Fund vs Axis Small Cap Fund: Key Comparison
| Feature | SBI Small Cap Fund | Axis Small Cap Fund |
|---|---|---|
| Launch Year | 2013 | 2013 |
| Fund Manager | R. Srinivasan | Shreyash Devalkar |
| AUM | ₹30,000+ Cr | ₹20,000+ Cr |
| Expense Ratio | ~0.75% | ~0.60% |
| 5-Year CAGR | ~22% | ~19% |
| Minimum SIP | ₹500 | ₹500 |
| Benchmark | S&P BSE Small Cap | Nifty Smallcap 250 |
| Risk Level | High | Moderately High |
Which Fund Performs Better in 2025?
When comparing SBI Small Cap Fund vs Axis Small Cap Fund, both funds have performed well, but their strategies are different:
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SBI Small Cap Fund invests more aggressively in smaller companies, aiming for higher long-term growth.
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Axis Small Cap Fund focuses on quality companies for more stable returns and lower risk.
So, if you’re looking for higher growth and can handle volatility, SBI Small Cap Fund is better.
If you want smoother returns and stability, Axis Small Cap Fund is a better match.
Expert View: What Should Investors Choose?
Most financial advisors agree that both funds are great options — your choice should depend on your risk appetite and investment period.
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For 10+ years investment: Go for SBI Small Cap Fund — it can deliver higher returns.
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For 5–7 years investment: Choose Axis Small Cap Fund for steady growth.
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Or, diversify by investing in both funds — 60% in SBI Small Cap Fund and 40% in Axis Small Cap Fund to balance risk and reward.
Historical Returns Comparison (as of 2025)
| Period | SBI Small Cap Fund | Axis Small Cap Fund |
|---|---|---|
| 1 Year | 38% | 34% |
| 3 Years | 26% CAGR | 23% CAGR |
| 5 Years | 22% CAGR | 19% CAGR |
| 10 Years | 20% CAGR | 18% CAGR |
(Returns are indicative and may vary with market conditions.)
FAQs About SBI Small Cap Fund vs Axis Small Cap Fund
Q 1. Is it safe to invest in small-cap funds?
Small-cap funds are not completely safe. They are risky in the short term but can give high rewards in the long term if you stay invested for 7–10 years.
Q 2. Which is better — SBI Small Cap Fund or Axis Small Cap Fund?
Over the long term, SBI Small Cap Fund has delivered slightly better returns, while Axis Small Cap Fund offers more consistent performance.
Q 3. Can I invest in both funds together?
Yes, investing in both helps you balance risk and reward. SBI adds growth potential, while Axis brings stability.
Q 4. Which fund is better for beginners?
Axis Small Cap Fund is better for beginners because it has lower volatility and stable returns.
Q 5. What is the ideal duration to stay invested?
At least 7–10 years. Small-cap funds need time to grow and recover from market ups and downs.
Q 6. Can small-cap funds help achieve financial freedom?
Yes! If you invest regularly through SIPs, small-cap funds can help you build a large corpus and achieve financial freedom faster.
Conclusion
When it comes to SBI Small Cap Fund vs Axis Small Cap Fund, both are strong contenders for long-term wealth creation.
Choose SBI Small Cap Fund — if you are an aggressive investor ready to take higher risk for higher returns.
Choose Axis Small Cap Fund — if you want steady returns with less market fluctuation.
Best strategy — invest in both for a perfect balance of growth + stability.
Start your SIP today and let compounding work for you.
Want to see how your SIP can grow? Use the SIP Calculator 2025 to calculate how much your ₹5,000 monthly SIP can become in 10 years!
Which one do you think performs better in 2025?
Share your thoughts in the comments — your insights can help others invest smarter!