Axis Max Life BSE 500 Dividend Leaders 50 Index Fund: A Passive Investment that Leverages the Performance of High Dividend Yield Companies

While the Indian economy has continued to show resilience in the face of global economic headwinds, earnings growth is expected to be moderate and the broader markets is expected to trade sideways in the near future. In such a scenario, investors might be inclined to focus on companies that have robust cash flows and the potential to offer consistent returns even during relatively volatile market conditions.

One way to identify such companies is to use the dividend yield metric, but selecting individual high dividend-yield stocks to invest in from the entire universe of listed companies would require significant effort and be a time consuming task. This is where the Axis Max Life BSE 500 Dividend Leaders 50 Index Fund can emerge as an excellent investment option.

What is the Axis Max Life BSE 500 Dividend Leaders 50 Index Fund?

The Axis Max Life BSE 500 Dividend Leaders 50 Index Fund is a passively managed fund that will track the composition and performance of the BSE 500 Dividend Leaders 50 Index. The broad-based BSE 500 Index will serve as the stock universe for this fund and selection of stocks will based on the dividend yield factor.

Returns of the Fund

In order to get a better idea of how well this fund can potentially perform versus broader markets over various time periods, let’s take a closer look at the performance of the underlying index, BSE 500 Dividend Leader 50 Index verses the broad-based BSE 500 Index as of 31 October, 2025:

Note: Returns data as of October 31, 2025. 3 year,  5 year and 10 year returns data are CAGR returns for the respective indices based on back-tested returns data. The Total Returns variant for each index has been considered for returns calculation. Historical returns do not guarantee future performance. *The 10 year returns data in the above table are for a period of 9 years and 8 months.

As you can see, from the above back-tested data, the returns of the dividend-yield based index has been significantly better than the broader index over the medium and long-term period. Even though there is no guarantee that the same level of performance will be maintained in the future, this indicates that those who stay invested in the long term would potentially benefit from the superior performance of this fund in comparison to the broader markets.

Key Features of the Fund

Being an equity fund, a minimum equity allocation of 70% must be maintained at all times. As the BSE 500 Index serves as the stock universe for this fund, the equities chosen for inclusion are expected to be well-diversified across multiple sectors and market capitalisations. The fund will however retain the flexibility to maintain up to 30% portfolio allocation towards potentially less volatile investments such as cash, money market instruments, Government securities and corporate bonds.

New and existing policyholders of Axis Max Life ULIP products will be able to invest in this fund through various ULIP offering such as – Flexi Wealth Advantage Plan (FWAP) and Online Savings Plan (OSP). This will enable policyholders to receive the dual benefit of factor-based equity investments and life cover through a single solution.

How will the Axis Max Life BSE 500 Dividend Leaders 50 Index Fund Choose its Investments?

The Axis Max Life BSE 500 Dividend Leaders 50 Index Fund will attempt to replicate the composition of the BSE 500 Dividend Leaders 50 Index. As a result, the fund’s stock selection process will closely match that of the index being tracked. Below are some key steps in the stock selection process of this fund:

Step 1. Only BSE 500 listed stocks that have consistently paid dividends for the past 10 years and have a listing history of at least 5 years are considered eligible for inclusion.

Step 2. Next the below 4 data points for each of the stocks qualifying in the above criteria are calculated:

• Annual dividend per share for each reference period
• Average dividend yield for the previous 3 years
• Z score of each stock based on the annual dividend per share and average dividend yield for the last 3 years
• Total market capitalization on the last day of the reference period

The dividend yield of a stock is calculated using the below formula:

Dividend Yield = Dividend Per Share/Market Price per Share

A high dividend yield shows that a company is distributing a large proportion of its earnings to shareholders. This typically implies strong cash flow generation or undervaluation of the stock. For investors this factor may help identify and select investments that have the potential to deliver consistent performance even during periods of volatility in broader markets.

Step 3. The 50 companies with the highest Z score calculated in the previous step are considered eligible for inclusion into the index subject to additional criteria such as:

• Declaration of dividends at least 80% of the time over the last 10 years
• The 3 year average dividend yield of the stock should not be in the bottom quartile within the eligible universe

Step 4. Once the list of 50 eligible stocks has been short listed, two further checks are done before finalising the list:

• At least 85% of the stocks featured on the index have distributed dividends in at least 2 of the previous 3 years
• At least 85% of the stocks featured on the index have a minimum dividend rate of 10%

Note: The complete details of the stock selection criteria are freely available on the official BSE website.

Since the Axis Max Life BSE 500 Dividend Yield 50 Index Fund will mirror the composition of the index being tracked, the stock selection process of the fund will be transparent and free of potential fund manager bias. Now that you have better understanding of the stock selection process for this index fund, let’s take a closer look at the key stocks and sectors that the fund will potentially include in its portfolio.

What will the Axis Max Life BSE 500 Dividend Leaders 50 Index Fund Invest in?

Since the Axis Max Life BSE 500 Dividend Leaders 50 Index Fund will track the composition of the underlying index, the fund’s portfolio will feature the same 50 stocks as the index along with their individual weights. The top 5 stocks and their individual weight on the BSE 500 Dividend 50 Index as of October 31, 2025 are as below:

As you can see from above, the top 5 stocks by weight belong to sectors such energy and commodities, which have the potential to generate strong cash flows. So, in recent times, companies that belong to these sectors have emerged as leading dividend distributors in the domestic market.

Key sectors that the Axis Max Life BSE 500 Dividend Leaders 50 Index Fund will feature in its portfolio can be illustrated by taking a closer look at the sectoral composition of the underlying index. Below table shows the key sectors that were featured on the index as of October 31, 2025:

Note: The reconstitution of the fund will be done in accordance with the Index and specified IRDAI Limits.

As you can see from above, the Axis Max Life BSE 500 Dividend Leader 50 Index is highly diversified and provides exposure to wide range of sectors ranging from energy and information technology to commodities, ultilities and financial services. Since the Axis Max Life BSE 500 Dividend Leader 50 Index Fund will replicate the underlying index, investors can get exposure to diverse industries through this fund. This will help minimise the potential concentration risk in the fund portfolio.

Who Should Invest in the Axis Max Life BSE 500 Dividend Leaders 50 Index Fund?

The Axis Max Life BSE 500 Dividend Leaders 50 Index Fund is an equity fund that invests in market-linked instruments. So it is subject to various risks commonly associated with equities such as market risk, liquidity risk, concentration risk, etc. As a result, this fund might not be suitable for the needs of all policyholders. Some key groups of individuals who may benefit from investments made into this fund include the below:

• Investors who are seeking equity investments to diversify their existing portfolio
• Investors who are seeking benefit from the performance of companies with high dividend yield
• If you have high risk appetite and are able to stay invested in the long-term even in the face of volatility
• Individuals who want to incorporate factor-based investment strategy based on dividend yield scores
• Investors who prefer the transparency of rules based investing process of index funds
• Those seeking investment in equity funds that are passively managed hence free of fund manager bias

The above list of potential groups of individuals who may benefit by investing in this fund is illustrative and there may be other types of investors who may benefit from this investment.

How to Invest in the Axis Max Life BSE 500 Dividend Leaders 50 Index Fund?

Both new as well as existing policyholders of Axis Max Life ULIP products can get access to the Axis Max Life BSE 500 Dividend Leaders 50 Index Fund. During the NFO period, this index fund will be accessible through the below ULIP offerings of Axis Max Life:

• Online Savings Plan (OSP)
• Flexi Wealth Advantage Plan (FWAP)
• Capital Guarantee Solution*

Note:*Capital Guarantee solution is a life insurance solution that provides life cover and helps you earn market-linked returns through a ULIP product, and the promise of guarantee returns (equal to ROP) with a non-par savings product.

Post completion of the NFO period, policyholders can invest in this fund through the below Axis Max Life Unit Linked Insurance Plans:

• Platinum Wealth Plan
• Fast Track Super Plan
• Flexi Wealth Advantage Plan
• Flexi Wealth Plus Plan and
• STAR (Smart Term with Additional Returns) ULIP

Snapshot of the Axis Max Life BSE 500 Dividend Leaders 50 Index Fund

Investment Objective: 

The fund will invest in a basket of stocks drawn from the constituents of BSE 500 Dividend Leaders 50 Index. The fund will invest in companies with similar weights as in the index and generate returns as closely as possible, subject to tracking error.

Stock Universe: BSE 500 Index

Benchmark Index: BSE 500 Dividend Leaders 50 Index

Risk Profile: Very High

Asset Allocation of Fund:

ULIP Products for Initial Launch: Flexi Wealth Advantage Plan and Online Savings Plan

NFO Period @ Rs. 10 per unit from 10 November 2025 to 20 November 2025

Other Factor-Based Passive Funds From Axis Max Life Insurance

Other factor-based passive funds launched by Axis Max Life Insurance previously include the below:

BSE 500 Value 50 Index Fund

This is a passively managed equity fund that uses the value score factor to select stocks from the broad-based BSE 500 Index. The fund’s portfolio consists of 50 stocks and replicates the weight and composition of the BSE 500 Value 50 Index constituents. As per fund mandate, minimum 80% equity exposure is mandatory for the fund, while the remaining up to 20% of the fund portfolio may be invested in money market instruments and cash/cash equivalents.

Nifty 500 Multifactor 50 Index Fund

This is a passively managed fund that tracks the composition and performance of the Nifty 500 Multifactor MQVLv 50 Index, subject to tracking error. The 50 stocks that are included in the fund portfolio are equities that feature the highest composite score based on 4 factors – Momentum, Quality, Value and Low Volatility. This equity fund must maintain minimum equity exposure of 80% at all times, while retaining the flexibility to invest the remaining up to 20% of the fund’s investible assets in money market instruments and cash/cash equivalents.

Sustainable Wealth 50 Index Fund

This index fund tracks the proprietary Axis Max Life Sustainable Yield Index, which is managed by the NSE. The portfolio of this passively managed equity fund comprises 50 stocks that feature the highest percentile score of free cash flow (FCF) yield for non-financial companies and dividend yield for financial companies. As per mandate, the equity allocation in this fund’s portfolio cannot be less than 80% at any time. Meanwhile, cumulative exposure of the fund towards cash/cash equivalents and money market instruments can be up to 20% of the fund portfolio.

Moneycontrol Journalists are not involved in creation of this article.