Axis Max Life BSE 500 Value 50 Index Fund

This index fund features a high degree of diversification across various sectors and market capitalisations that can help control overall portfolio risk while optimising overall investment returns. As per the mandate of this equity fund, the minimum equity allocation that the fund must maintain at all times is 80%. The remainder of fund assets i.e. up to 20% may be allocated to a variety of money market instruments and equivalent.

The stock picking strategy implemented by this index fund will be same as is underlying index, as a result, the fund will follow a transparent rules based stock picking methodology. Detailed documentation regarding the methodology used by the underlying index is freely available for viewing and download on the Asia Indices website of the NSE.

Value investing has often been considered as one of the more successful investment strategies implemented by investors all around the world. However, a majority of these successful value investors have opted for an actively managed investment portfolio. In order to determine if an index fund based on the value strategy can successful grow investor wealth, let us look at a comparison of the BSE 500 Value 50 Index returns versus the returns of its parent index, the BSE 500 Index as of 30 June, 2025:

Note: Above returns data are based on Total Returns Index data of respective indices as of 30th June 2025. The 3 years, 5 years, 10 years and returns since inception data shown above are CAGR returns of the indices.

As you can see from above, the 50 stock value index has managed to significantly outperform the broad based BSE 500 Index over various time period. There is, however, no guarantee that the Axis Max Life BSE 500 Value 50 Index Fund or its underlying index will be able to maintain the same level of relative outperformance in the future. But, there is definite potential for long-term capital appreciation in case an investor chooses to invest in this index fund and stays invested for the long term.

As the composition of the BSE 500 Enhanced Value 50 Index is mirrored by the Axis Max Life BSE 500 Value 50 Index Fund, the stock picking methodology of the index will also be replicated by the fund. Below are the key steps involved in the process:

Step 1: Stock Universe and Primarily Filtering

The BSE 500 Index is the stock universe for the BSE 500 Enhanced Value Index. So, any stock that is not part of the BSE 500 Index is automatically eliminated from consideration. Subsequently, these 500 stocks are further filtered based on key liquidity parameters such as annual trade value, average daily turnover ratio and number of days when the stock was traded during the reference period. If any stock does not meet these liquidity parameters, it is not considered for inclusion in the index.

Step 2: Calculation of Value Score

The individual value score of each stock that was deemed eligible in the previous step is calculated next. In order to calculate the value score of each stock, 3 key financial ratios are considered:

• Book to Price Ratio – This ratio helps identify potential undervaluation of a stock with respect to the assets it holds.
• Earning to Price Ratio – This ratio helps identify potential undervaluation of a stock on the basis of its profitability.
• Sales to Price Ratio – This ratio helps identify potential undervaluation of a stock on the basis of its revenue generation capability

Once these 3 ratios are calculated, they are combined using various statistical methods in order to determine the value score of each individual stock.

Step 3: Ranking and Final Selection

Once the final value score of each stock has been obtained, these eligible stocks are ranked according their value scores. The 50 stocks with the highest value scores are selected for inclusion into the BSE 500 Enhanced Value 50 Index. These same stocks will also be featured in the portfolio of the Axis Max Life BSE 500 Value 50 Index Fund.

Note: The document containing complete details of the stock selection methodology is freely available for viewing and downloading from the Asia Indices website of the BSE.

In order to better understand potential exposure across market caps and sectors that the Axis Max Life BSE 500 Value 50 Fund can provide, let’s take a closer look at the constituent stocks and sectors that the fund tracks. The below table shows the top 5 sectors featured on the BSE 500 Enhanced Value 50 Index as of June 30, 2025:

As you can see, this index has almost 70% exposure to the financial and energy sectors as of 30 June, 2025. But apart from these 2 sectors, the index also has significant exposure to various sectors such as commodities, consumer discretionary and industrials. This helps ensure a high degree of diversification and potentially low concentration risk for investors. So, an index fund tracking the BSE 500 Enhanced Value 50 Index will feature an equal degree of sectoral diversification so that potential risks associated with underperformance of any particular sector or industry is mitigated to a significant extent.

Now let’s take a closer look at the top 5 stocks featured in this index and their individual weights as of 30 June, 2025:

As you can see from above, the individual weight of any single stock featured on this index as of June 30, 2025 is restricted to around 6%. As this same weightage will be replicated by the Axis Max Life BSE 500 Value 50 Fund, this limited exposure to any single stock can help minimise the potential concentration risk for investors of the fund. The diversification across multiple sectors along with reduced concentration risk can help optimise overall returns while reducing the potential risk from the fund portfolio.

Axis Max Life BSE 500 Value 50 Index Fund is available to new and existing Axis Max Life policyholders through various ULIP offerings of Axis Max Life Insurance. Below mentioned are the different ULIP plans through which policyholders can invest in this index fund during the NFO (new fund offer) period:

While value investing has been historically successful in generating high returns in the long term for many, these are equity investments that feature significant risks. Hence, investing in the Axis Max Life BSE 500 Value 50 Index Fund might not be suited to the needs of all investor groups. Below are some key types of investors who may benefit from a passively managed fund that uses value strategy to select undervalued stocks with the potential to provide future capital appreciation

Axis Max Life BSE 500 Value 50 Index Fund provides a passively managed route for value investing to Axis Max Life ULIP policyholders. However, this is not the only index fund that Axis Max Life Insurance currently offers. Other index funds based on different investment strategies such as factor investing that that are currently available through different ULIP plans of Axis Max Life Insurance includes the following: