Retirement Planning requires not only the discipline to stay invested over the long term, but also the right choice of investment. One metric that one might find useful in identifying companies that are consistent performers is the dividend yield of stocks.
A high dividend yield typically indicates that the company has historically maintained steady cash flow and hence might be better equipped to handle challenging market conditions.
One way you can leverage the dividend yield factor and stay on track to reach your retirement corpus goal is to invest in the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund.
This is a passively managed pension fund that tracks the BSE 500 Dividend Leaders 50 Index and available to current as well as new Axis Max Life pension plan policy holders. Let’s check out some key details of this pension fund.
What is the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund?
The Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund is a passively managed index fund that will track the BSE 500 Dividend Leaders 50 Index within the margins of tracking error. The fund’s portfolio will primarily consist of 50 companies that are part of the BSE 500 Index, selected on the basis of normalised dividend yield score.
The use of dividend yield factor in stock selection is expected to help identify financially stable companies with a consistent track record of paying dividends. Such companies tend to have steady cash flows and are expected to be better placed to perform steadily even during periods of market uncertainty.
So, a fund that focuses on making stock investments based on dividend yields may be suitable for achieving long-term financial goals such as building a retirement corpus. What’s more being a passively managed pension fund, the risk of fund manager bias is also minimised.
Returns of the Pension Fund
As the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund is a new fund, no historical data of this pension fund are available as of yet.
However, since this index pension fund will attempt to mirror the performance of the BSE 500 Dividend Leaders 50 Index, the historical returns of the underlying index may be used as a surrogate.
Note: Returns data as of October 31, 2025. *The 10 year returns data in the above table are for a period of 9 years and 8 months. The 3 year, 5 year and 10 year returns data are CAGR returns for the respective indices based on back-tested data. The Total Returns variant for each index has been considered for returns calculation. Historical returns do not guarantee future performance.
As you can see, across various time periods, the BSE 500 Dividend Leaders 50 Index has shown higher returns. So, an index pension fund that mirrors the performance of the BSE 500 Dividend Leaders 50 Index may have the potential to deliver competitive long-term performance.
As a result, the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund may be a suitable investment option for those seeking an equity investment to help them reach long-term goals such as creating a large retirement corpus.
Key Features of the Pension Fund
Below are some key features of the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund to consider before you invest:
- Passive management: The pension fund will attempt to replicate the portfolio and weight of individual stocks featured on the BSE 500 Dividend Leaders 50 Index. This will make the stock selection process transparent and reduce fund manager bias.
- Factor Based Selection: The pension fund will use the dividend yield factor to rank stocks that are part of the BSE 500 Index universe. Top 50 companies that have the highest normalised dividend yield scores while meeting other qualifying criteria such as listing history and dividend distribution track record will be included in the fund portfolio.
- Equity Focus: This pension fund will maintain an equity allocation within the approved range of 80% to 100%. This may help the pension fund offer inflation-adjusted long-term returns.
- Diversification cross Asset Classes: The pension fund retains the flexibility to allocate up to 20% of investible assets towards relatively less volatile asset classes. Available options include cash and money market instruments.
- Annual Rebalancing: The Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund will follow the same annual rebalancing schedule as its underlying index. At the time of rebalancing in December, the portfolio of the fund may undergo changes with inclusion of new dividend yield stocks replacing previously featured stocks with lower dividend yield.
How Will the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund Choose Investments?
The pension fund will attempt to mirror the composition of the BSE 500 Dividend Leaders 50 Index. So the stock selection process of the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund will be similar to that of the underlying index. Key steps in this process include:
Step 1: Stocks Universe and Initial Filters
Below are some key criteria that a stock needs to fulfil in order to be considered eligible:
- Only stocks listed on the BSE 500 Index are considered eligible
- Stocks that have paid dividends consistently in the previous 10 years
- Stocks with minimum listing history of 5 years
Step 2: Dividend Yield Score Calculation
The following data points are used for stocks that are found to be eligible in the previous round of screening:
- Annual dividend yield per share for each reference period
- Average dividend yield for the previous 3 years
- Z score of the stock based on the annual dividend yield per share and the average dividend yield for the previous 3 years
- Total market capitalization of the stock
Note: The dividend yield is calculated using the formula (Dividend Yield = Dividend per Share/Market Price per Share). A high dividend yield suggests that the company has stable cash flow and is capable of distributing a large amount of dividend with respect to its share price.
Step 3: Constituent Selection
The 50 companies with the highest Z score are considered eligible for inclusion into the BSE 500 Dividend Leaders 50 Index, subject to meeting the below criteria:
- Declaration of dividends at least 80% of the time during the last 10 years
- The 3 year average dividend yield of the stock should not be in the bottom quartile within the eligible universe
As you can see, the stock selection criteria focuses on the use of dividend yield score as the major screening factor. Since the same selection criteria holds true for the Axis Max Life BSE 500 Dividend Yield 50 Index Pension Fund, policyholders would be investing in a portfolio of stocks with a consistent track record of dividend distribution.
Note: The stock selection process described above is intended as an illustration only. The complete details of selection methodology are available on the official BSE website.
Key Investments of the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund
The pension fund will track the BSE 500 Dividend Leaders 50 Index. So, the portfolio of the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund will features the same 50 stocks as the underlying index along with the individual weight of each stock on the index.
Here’s a closer look at the top stocks featured on the index along with their individual weights as of October 31, 2025:
| Stock Name | Weight on Index |
|---|---|
| Hindustan Petroleum Corporation | 4.58% |
| Indian Oil Corporation Ltd. | 4.43% |
| Bharat Petroleum Corporation | 4.31% |
| Vedanta Limited | 4.26% |
| Oil and Natural Gas Corporation Ltd. | 4.26% |
As, you can see, the individual weight of any particular stock featured on the index is relatively low, which can help reduce overall concentration risk. So, the impact of any single stock’s underperformance or outperformance on the overall performance of the pension fund that mirrors this index is also expected to be minimal.
Next, let’s take a look at the various sectors that are featured on the BSE 500 Dividend Leaders 50 Index along with their individual weight as of October 31, 2025:
| Sector | Weight on Index |
|---|---|
| Energy | 30.15% |
| Information Technology | 18.20% |
| Commodities | 17.40% |
| Financial Services | 10.40% |
| Utilities | 10.99% |
Note: The reconstitution of the fund will be done in accordance with the Index and specified IRDAI Limits.
As you can see, the index constituents are well-diversified across multiple sectors. So, by mirroring this index, the Axis Max Life BSE 500 Dividend Yield 50 Index Pension Fund would provide policyholders exposure to a well-diversified portfolio of equity investments.
Who Should Consider Investing in the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund?
This equity pension fund is categorized as a very high-risk investment and it may be prone to volatility in the short term. However, the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund might suit the needs of various individuals saving for retirement, such as:
- Those seeking equity investments to diversify their existing retirement portfolio
- Those who want to leverage the performance of companies with proven track record of high dividend distribution
- Individuals with high risk appetite who are able to stay invested for the long-term, even in the face of short-term volatility
- Investors who want to incorporate factor-based investment strategy based on dividend yield scores
- Those who prefer the transparent rules-based investing process of index funds that minimises fund manager bias
The above list of individuals who may consider investing in this pension fund is illustrative, not exhaustive. There may be other categories of individuals who may benefit from investing in this index pension fund to reach their retirement savings goals.
How to Invest in the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund?
The Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund will be available to new and existing policyholders of the Axis Max Life Forever Young Pension Plan. This will enable eligible Axis Max Life pension plan holders to receive in-built life cover benefits along with market-linked returns from dividend yield-based stock investments via a single solution.
Snapshot of the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund
Investment Objective: Objective of the pension fund is to 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: BSE 500 Dividend Leaders 50 Index
| Asset Type | Approved Range |
|---|---|
| Equity (Index Stocks) | 80% – 100% |
| Cash and Money Market Instruments | 0% – 20% |
NFO Period: November 17 to December 1, 2025.
Other Pension Funds from Axis Max Life Insurance
Below are key details of other pension funds currently offered by Axis Max Life Insurance through its various pension plan offerings:
Axis Max Life Nifty 500 Multifactor 50 Index Pension Fund
This passively managed equity pension fund aims to track the Nifty 500 Multifactor MQVLv 50 Index within the margins of tracking error. This index pension fund uses the composite score of 4 different factors – momentum, quality, value and low volatility, to select suitable stocks to invest in. The portfolio of this pension fund comprises 50 stocks drawn from the broad-based Nifty 500 Index. This helps the pension fund create a stock portfolio that is diversified across market capitalisations and sectors.
UL Pension Growth Super Fund
The UL Pension Growth Super Fund is an actively managed equity pension fund that uses the Nifty 50 Index as its benchmark. The primary goal of this pension fund is to outperform the benchmark index through actively selecting and investing in equity stocks. As per mandate at least 70% equity exposure must be maintained by the pension fund at all times. The remainder comprising up to 30% of fund assets may be invested in money market instruments, Government securities, corporate bonds and cash, as per the fund manager’s discretion.
The High Growth Pension Fund is an actively managed equity pension fund that is benchmarked against the Nifty 100 Midcap Index. This fund is primarily focused on making potentially high growth midcap equity investments and as per fund mandate minimum 70% equity exposure must be maintained at all times. This pension fund also retains the flexibility to invest up to 30% of its investible assets in various potentially less volatile instruments such as Government securities, corporate bonds, money market instruments and cash.
Note to the Reader: This article has been produced on behalf of the brand by HT Brand Studio and does not have journalistic/editorial involvement of Mint.