Axis Max Life Insurance floats Axis Max Life Sustainable Wealth 50 Index Fund; check investment details

Axis Max Life Insurance Ltd, previously known as Max Life Insurance Company Ltd, has introduced the Axis Max Life Sustainable Wealth 50 Index Fund. This specialised Index Fund, managed by NSE Indices Limited, is designed to invest in companies that generate cash flow to support their expansion.

The Axis Max Life Sustainable Wealth 50 Index Fund represents a pioneering addition to the insurance industry, being the first of its kind proprietary index fund.  This fund is open for subscription from January 2 to January 16, 2025.

Key Features

Investment Objective: The fund will allocate equal weight to all 50 stocks in its portfolio, in accordance with IRDAI regulations. The portfolio will be diversified as stocks are chosen from the extensive Nifty 500 Index.

These stocks are carefully chosen using a unique, equal-weight, factor-based quantitative index. Companies included in the fund are selected from the NSE 500 stocks based on their free cash flow yield (FCF Yield) for non-financial firms and dividend yield for financial companies.

The portfolio will employ a quantitative, factor-based index strategy, with an emphasis on Free Cash Flow Yield (FCF Yield) for non-financial firms and Dividend Yield for financial firms.

When selecting financial stocks for the fund portfolio, only those with the highest percentile score in dividend yield will be chosen. 

For non-financial stocks, companies with the top percentile score in Free Cash Flow (FCF) Yield are included. The goal is to choose financially stable and potentially growing companies with strong cash reserves or profits.

Purposefully crafted to cater to the escalating investor desire for sustainable and performance-oriented investments, it will be introduced through Axis Max Life's Online ULIP products, such as the Online Savings Plan and Flexi Wealth Advantage Plan. Future expansion of availability is also in the pipeline.

“As the first proprietary index fund in the insurance industry, the Axis Max Life Sustainable Wealth 50 Index Fund offers exclusive access to a quantitative, factor-based index. It aligns with growing investor demand for sustainable and value-driven investments. By focusing on companies with strong cash flows and consistent growth potential, the fund caters to customers seeking stability and performance,” the company said in a press release.

“This fund leverages the power of a unique, factor-based index that identifies companies with robust cash flows based on our internal methodology," said Sachin Bajaj, EVP and Chief Investment Officer at Axis Max Life. 

Mukesh Agarwal, CEO, NSE Indices Limited, said, “We have worked with Axis Max Life Insurance Company to create this customised index based on Axis Max Life Insurance’ methodology. The customised Index will be computed and maintained by NSE Indices Limited.”

The Axis Max Life Sustainable Yield Index undergoes an annual review on June 15 every year to assess its performance and make any necessary adjustments. This includes the addition of new stocks and the removal of underperforming ones to align the index composition with market trends.

As a new Index, the returns of the index are back-tested over different timeframes to demonstrate its outperformance compared to the benchmark Nifty 500 Equal Weighted Index as of November 29, 2024.

Timeperiod    Axis Max Life Sustainable Wealth Fund    Nifty 500 Equal Weighted Index

1 Year             54.40%                                                      30.50%

3 Years           38.90%                                                      20.40%

5 Years           42.10%                                                      24.10%

10 Years         25.20%                                                      14.90%

Source: NSE and Axis Max Life Back Test results