Retirement planning demands both long-term investment discipline and smart investment choices. One effective strategy for identifying consistent performers in the stock market involves analyzing dividend yield metrics. Companies maintaining high dividend yields typically demonstrate stable cash flows and greater resilience during market downturns.
New Pension Fund Leverages Dividend Yield Strategy
Axis Max Life Insurance has introduced the Axis Max Life BSE 500 Dividend Leaders 50 Index Pension Fund, a passively managed investment vehicle that tracks the BSE 500 Dividend Leaders 50 Index. This fund becomes available to both new and existing Axis Max Life pension plan policyholders from November 17 to December 1, 2025, during its New Fund Offer period.
The fund's investment approach centers on dividend yield as the primary selection criterion, targeting companies with proven track records of consistent dividend payments. Such companies generally possess financial stability and steady cash flows, making them potentially better positioned to weather market uncertainties.
How The Fund Selects Investments
The investment selection process follows a rigorous, rules-based methodology mirroring the underlying index. The screening begins with stocks listed on the BSE 500 Index that have maintained consistent dividend payments over the previous decade and possess a minimum listing history of five years.
Eligible stocks then undergo dividend yield score calculation using multiple data points: annual dividend yield per share, three-year average dividend yield, Z-score based on dividend yield, and total market capitalization. The final selection includes the top 50 companies with the highest Z-scores that meet additional criteria, including dividend declaration frequency of at least 80% during the past ten years.
The fund maintains equity allocation between 80% to 100%, with the flexibility to invest up to 20% in cash and money market instruments. Annual rebalancing occurs each December, ensuring the portfolio reflects current high-dividend-yield stocks.
Historical Performance and Portfolio Composition
While the new fund lacks its own performance history, the underlying BSE 500 Dividend Leaders 50 Index has demonstrated competitive returns across various time periods as of October 31, 2025. The index has outperformed the broader BSE 500 Index in three-year, five-year, and ten-year return comparisons, though historical performance doesn't guarantee future results.
The fund's portfolio features diversified exposure across sectors, with significant weights in Energy (30.15%), Information Technology (18.20%), Commodities (17.40%), Utilities (10.99%), and Financial Services (10.40%). Top individual holdings include Hindustan Petroleum Corporation (4.58%), Indian Oil Corporation Ltd. (4.43%), Bharat Petroleum Corporation (4.31%), Vedanta Limited (4.26%), and Oil and Natural Gas Corporation Ltd. (4.26%).
Who Should Consider This Investment?
This very high-risk equity pension fund suits investors seeking several specific benefits: diversification for existing retirement portfolios, exposure to companies with proven dividend distribution records, factor-based investment strategies, and transparent rules-based investing that minimizes fund manager bias.
The fund particularly appeals to individuals with high risk tolerance who can maintain long-term investment horizons despite short-term market volatility. By focusing on dividend yield as a selection factor, the fund aims to identify financially stable companies capable of delivering consistent performance.
Axis Max Life offers additional pension fund options, including the Nifty 500 Multifactor 50 Index Pension Fund, UL Pension Growth Super Fund, and High Growth Pension Fund, providing varied approaches to retirement savings through different investment strategies and risk profiles.
