Axis Max Life BSE 500 Value 50 Index Fund – A Unique Passively Managed Approach to Value Investing

In investing, buying low and selling high has been the primary goal for many investors. One popular investment strategy, value investing, is specifically dedicated to finding ways that can help identify potentially undervalued stocks that can be bought cheaply and generate high returns when the stock price increases in the future. However, implementing value investing strategy by yourself can be difficult and time consuming considering the need for in-depth research.

What if there was a way for you to benefit from value investing without any need to research hundreds of stocks by yourself? This is now possible with the Axis Max Life BSE 500 Value 50 Index Fund.

The Axis Max Life BSE 500 Value 50 Index Fund is a passively managed equity fund that tracks the BSE 500 Enhanced Value 50 Index. This new Axis Max Life index fund is offered through various ULIP plans of Axis Max Life Insurance which provide also life cover to policyholders as an inbuilt benefit. Read on to know key details about this fund so that you can determine if this is a suitable option to help you reach your financial goals.

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

The Axis Max Life BSE 500 Value 50 Index Fund is a passively managed fund that will replicate the composition and track the performance of the BSE 500 Enhanced Value 50 Index subject to tracking error. The portfolio of this index fund will feature 50 stocks across various sectors and market capitalisations selected on the basis of their high value scores. In effect, this fund can help investors make value investments in stocks that are featured in the BSE 500 Index without worrying about fund manager bias.

While value investing has been around for decades and been favoured by many prominent investors in India and abroad, such investments have historically been actively managed. So, it is definitely a good idea to check how an index based on a value investment strategy has fared versus a broad-based index over various time periods. This is especially important if one considers that the BSE 500 Enhanced Value 50 Index will be mirrored by the Axis Max Life BSE 500 Value 50 Index. The below table compares the returns of the BSE 500 Enhanced Value 50 Index versus the BSE 500 Index as of 30 June, 2025:

As you can see, in the medium to long-term, the BSE 500 Enhanced Value 50 Index has managed to outperform the parent BSE 500 Index by a considerable margin in most cases. This shows that historically, value investing methodology would have provided investors in India an edge even if done via a passive route. There is however no guarantee that this same level of performance will be maintained in the future. But, based on historical index performance, the Axis Max Life BSE 500 Value 50 Index Fund can definitely be considered a potentially profitable inclusion into a long-term investor’s portfolio.

The Axis Max Life BSE 500 Value 50 Index Fund will be offered as part of various Axis Max Life unit linked insurance plan offerings. These plans provide policyholders with the dual benefit of life insurance and market linked investment returns that leverage popular value investing strategies. Let’s understand how this works in greater detail so that you can determine if this fund is suitable for your financial needs.

How Does the BSE 500 Enhanced Value 50 Index Select Stocks?

The BSE 500 Enhanced Value 50 Index uses a value score approach to selecting stocks for inclusion into the index. The stock universe used for the selection is the broad-based BSE 500 Index. This list is further filtered using factors such as liquidity to decrease the number of stocks that are considered for inclusion. In order to arrive at the value score of individual stocks that are part of the universe, three key financial ratios are used, as discussed below:

1) Book to Price Ratio: This ratio takes into account the book value of a company i.e. value of its assets less liabilities. The book value indicates the intrinsic worth of the company. This ratio also considers the market value of the company, which is the value currently assigned to the company by the equity market. The formula to calculate Book to Price ratio is this:

Book to Price Ratio = (Book Value per Share / Market Value per Share)

Here, a high Book to Price ratio typically indicates that the equity markets are undervaluing a stock with respect to its intrinsic worth. This indicates the potential for high future returns when the stock price moves closer to the intrinsic value of the stock based on the net assets it holds.

2) Earnings to Price Ratio: This ratio compares the earnings per share of a company to the market price of each share. The formula to calculate earnings to price ratio of a stock is this:

Earnings to Price Ratio = (Earnings per share / Market Price per share)

A high earnings to price ratio often indicates that the equity market is undervaluing the stock at present. This stock may therefore have room for future market price increase leading to growth in investor’s wealth based on the profitability of the company.

3) Sales to Price Ratio: This ratio is designed to measure the stock’s value with respect to its sales. In this scenario, “sales” is used as the key metric for determining revenue generation capability of the company. The formula to calculate this ratio is:

Sales to Price Ratio = (Sales per Share / Market Price per Share)

High sales to price ratio typically indicates undervaluation by equity markets with respect to the revenue potential of the company. This too can lead to significant gains for the investor in the future when the market price increases to account for the revenue generation capability of the company.

After the above 3 ratios for each eligible stock in the BSE 500 universe in calculated, the value score of each stock is calculated based on these ratios. The top 50 companies with the highest value scores are selected for inclusion in the BSE 500 Enhanced Value 50 Index. The detailed stock selection methodology document of the index can be viewed and downloaded from the Asia Indices website of the BSE.

The value investing philosophy implemented by the BSE 500 Enhanced Value 50 Index can also be represented using the below infographic:

As you can see from above, the focus is on selecting established brands with strong fundamentals at a price that is lower than their actual worth. Such stocks have the potential to deliver substantial returns when they can be sold at a significantly higher price later on when the market value moves closer to the intrinsic value of the stock.

As the Axis Max Life BSE 500 Value 50 Index Fund will replicate this index, the portfolio of the fund will follow the same selection principle based on the 3 key financial ratios mentioned above.

Key Investments of the Axis Max Life BSE 500 Value 50 Index Fund  

To help you determine whether the Axis Max Life BSE 500 Value 50 Index Fund is a suitable investment for your needs, let’s take a closer look at the portfolio constituents of the fund. As already mentioned, this passively managed fund will replicate the composition of the BSE 500 Enhanced Value 50 Index so, the portfolio of the Axis Max Life BSE 500 Value 50 Fund will feature similar portfolio allocation as the index being tracked.

Below are the top 5 sectors featured on the BSE 500 Enhanced Value 50 Index as of 30 June, 2025:

As you can see from above, two key sectors – Financial and Energy account for around 70% of the portfolio assets. While this shows some degree of concentration in these sectors, this index is well-diversified and features significant exposure to a range of other sectors such as commodities, industrials, consumer discretionary, etc. This can help limit the concentration risk in the investor’s portfolio.

Similarly, individual stocks featured on the index will also be part of the fund portfolio as per the individual weightage assigned to each stock. Below are the top 5 individual stocks along with their respective weights as on the BSE 500 Enhanced Value 50 Index as of 30 June, 2025:

As you can see from above, no individual stock featured on the index exceeds 6.33% weight on the index as of June 30, 2025. This limit on exposure to any single stock indicates that the concentration risk associated with any single company is minimised. So, the fund’s overall performance will not be impacted in a significant way due to the outperformance or underperformance of any single stock included in the fund portfolio.

Why Should You Invest in the Axis Max Life BSE 500 Value 50 Index Fund?

In recent months the market has been quite volatile and in such a situation, a time-tested strategy such as value investing has the potential to help deliver substantially high long-term returns. The basis of stock selection used by this investment strategy can help identify stocks that have a low current market value compared to their intrinsic value.

In due course, as the market value moves closer to the intrinsic value of the stock, the stock price will increase to reflect the stock’s intrinsic value leading to high long-term returns for the investor. There is sufficient historical precedence to indicate that for long-term investors with high risk appetite, value investing has the capability to provide substantial returns, however, like any other investing strategy there are various risks to consider.

Apart from the common risks associated with any equity investment such as liquidity risk and market risk, some key risks specifically associated with value investing are as below:

• Value investing tends to focus more on cyclical businesses such as oil & gas, metals, etc. while limiting focus on tech and other potentially high growth sectors. This may limit portfolio diversification to some extent.
• Some new-age businesses with high amounts of intangible assets might have high growth potential in the long-term but score low on popular value metrics such as the Price to Book ratio. This can result in missed investment opportunities for investors.

One should thus keep in mind that while value investing is a proven method of long-term wealth creation, it does not offer guaranteed returns to the investor. Investors should thus take time to do adequate research and determine if this specific investment strategy suits their unique wealth creation needs.

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

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

• Online Savings Plan (OSP)
• Flexi Wealth Advantage Plan (FWAP)
• Smart Term with Additional Returns (STAR) ULIP
• FWAP Smart Ultra Protect Rider (FWAP SUPR)
• Capital Guarantee Solutions* with OSP or FWAP as the market-linked product

*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, Axis Max Life BSE 500 Value 50 Index Fund will be offered through the below ULIP products:

• Platinum Wealth Plan
• Fast Track Super
• Flexi Wealth Super

All of the above plans from Axis Max Life Insurance are designed to provide the dual benefit of life cover and capital appreciation in a single package.

Snapshot of the Axis Max Life BSE 500 Value 50 Index Fund

Benchmark Index: BSE 500 Enhanced Value 50 Index

Stock Universe: BSE 500 Index

Risk Profile: Very High

Asset Allocation of Fund:

Investment Objective: Objective of the fund is to invest in a basket of stocks drawn from the constituents of BSE 500 Enhanced Value 50 Index based on value parameters. The fund will invest in companies with similar weights as in the index and generate returns as closely as possible, subject to tracking error.

NFO Period @ Rs. 10 per unit from 28 July 2025 to 10 August 2025          

Other Index Funds from Axis Max Life to Diversify Your Portfolio

Apart from this new value-based passively managed index fund, Axis Max Life Insurance offers various other index funds that can be availed through different Axis Max Life ULIP offerings. These include the following:

Nifty Smallcap Quality Index Fund

The Axis Max Life Nifty Smallcap Quality Index Fund in a smallcap oriented investment that selects investments using normalised quality scores. This fund mirrors the portfolio and performance of the Nifty Smallcap 250 Quality 50 Index with a portfolio of 50 high quality small cap stocks selected from the Nifty Smallcap 250 Index universe. This fund is well suited to the needs of long-term investors with a high risk appetite who want to invest in smallcap stocks with high long term growth potential.

Midcap Momentum Index Fund

Axis Max Life Midcap Momentum Index Fund is a midcap-oriented index fund that tracks the Nifty Midcap 150 Momentum 50 Index within the margins of tracking error. This passively managed index fund picks stocks for inclusion into its portfolio based on the momentum score of stocks featured in the Nifty Midcap 150 universe. This index fund is well-suited to the investment needs of long-term investors with high risk tolerance who seek to invest in domestic midcap stocks that have high long-term growth potential.

Nifty Momentum Quality 50 Fund

The Axis Max Life Nifty Momentum Quality 50 Fund is a passively managed fund that mirrors the performance of the Nifty 500 Multicap Momentum Quality 50 Index within the margins of tracking error. The portfolio of this multifactor index fund comprises 50 stocks selected from the broad-based Nifty 500 Index using a composite momentum and quality score of each individual stock. This multi-cap fund aims to provide a basket of diversified equity stocks to investors who are seeking long-term capital appreciation by incorporating a combination of momentum and quality investment strategies.

 Moneycontrol Journalists are not involved in creation of this article.