What is the Axis Max Life Sustainable Yield Index?
The Axis Max Life Sustainable Yield Index is a stock market index that includes the top 50 companies from the Nifty 500. These companies are chosen based on strong free cash flow, profitability, and growth potential. It covers large-cap, mid-cap, and small-cap stocks, offering a good mix of stability and growth. This index is ideal for investors looking for long-term returns from financially strong and sustainable companies.
Axis Max Life Sustainable Wealth 50 Fund is the newly launched New Fund Offer (NFO) that mirrors the performance of the Axis Max Life Sustainable Yield Index.
Key Features of the Axis Max Life Sustainable Yield Index
The key features of the Axis Max Life Sustainable Yield Index are as follows:
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Stock Selection: The index picks the top 50 stocks from the Nifty 500 benchmark, which includes large, mid, and small-cap companies.
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Passive Index Investment: Helps reduce non-systematic risks by eliminating issues like stock selection bias and fund manager bias.
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Free Cash Flow Strategy: Focuses on profitable, financially stable, and growth-oriented companies.
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Profitability Filter: Prioritizes companies already generating profits from their core operations.
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Financial Stability Filter: Selects companies with low debt to reduce risk and ensure stability.
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Growth Potential Filter: Identifies companies reinvesting profits to fuel long-term growth.
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Top 50 Aatmanirbhar Stocks: Aims to identify self-reliant, strong companies with sustainable long-term success.
Comparing Axis Max Life Sustainable Yield Index with Other Nifty 500 Funds
| Index Name |
3-Year Returns |
5-Year Returns |
10-Year Returns |
| Axis Max Life Sustainable Yield Index |
38.9% |
37.00% |
25.20% |
| NIFTY 50 Index |
13.6% |
16.2% |
12.20% |
| NIFTY Midcap 150 Index |
24.2% |
28.00% |
18.80% |
| NIFTY Smallcap 250 Index |
25.6% |
30.80% |
16.70% |
| NIFTY 500 Index |
16.9% |
19.50% |
13.90% |
| NIFTY 500 Equal Weight Index |
21.5% |
25.20% |
16.1% |
[Source: nseindia.com] *Returns as of 30 December 2024.
Therefore, if you had invested ₹100 in the Axis Max Life Sustainable Yield Index ten years back, it would have grown to ₹946 today. This means your investment has multiplied by 9.46 times, showcasing the excellent growth of the index over the years.
Free Cash Flow Strategy of the Axis Max Life Sustainable Yield Index
The Free Cash Flow (FCF) strategy measures the cash left after covering operating expenses and capital expenditures (CapEx). It highlights the company's financial health and ability to fund growth without relying on external sources.
Formula for Free Cash Flow (FCF):
FCF = Cash Flow from Operations − Capital Expenditures (CapEx)
Where the components are as follows:
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Cash Flow from Operations: Cash generated from the company’s core business activities, excluding income from investments or loans.
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Capital Expenditures (CapEx): Funds used to buy, upgrade, or maintain assets like real estate, machinery, or technology.
Why FCF Matters for the Axis Max Life Sustainable Yield Index
The Free Cash Flow strategy is the foundation of the Axis Max Life Sustainable Yield Index, focusing on companies with strong FCF to drive sustainable growth:
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Indicator of Financial Strength: Higher FCF indicates surplus cash for reinvestment or shareholder returns.
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Growth Potential: Higher FCF ensures sufficient funds for expansion, higher reinvestment, and more cash from operations. It leads to a self-reinforcing loop of growth and sustainable wealth.
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Reduced Dependency: Companies with high FCF are less reliant on external funding.
Axis Max Life Sustainable Yield Index Methodology
The Axis Max Life Sustainable Yield Index follows the methodology mentioned below:
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Index Construction: The index begins with the top 500 stocks, including 100 large-cap, 150 mid-cap, and 250 small-cap companies.
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Stock Selection Based on Free Cash Flow: From these, the top 50 stocks are selected based on their free cash flow performance.
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Profitability Filter: Companies that generate consistent profits from their operations are chosen in the first filter.
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Financial Stability Filter: Companies with low or manageable debt are selected to ensure financial stability and lower risk.
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Growth Potential Filter: The third filter identifies companies that reinvest profits wisely for future growth.
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Annual Reconstitution: The portfolio is reviewed and reconstituted annually on June 15 based on the free cash flow performance of the companies.
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Quarterly Rebalancing: Stocks are assigned an equal weight of 2%, with adjustments based on stock price movements, and the weight is reset to 2% during rebalancing.
What are the Constituent Stocks of the Axis Max Life Sustainable Yield Index?
The following list shows the top constituent Stocks of the Axis Max Life Sustainable Yield Index:
What are the Sectors Included in the Axis Max Life Sustainable Yield Index?
| Top Sectors |
Weightage of Invested Assets |
| Information Technology |
16% |
| Oil, Gas, & Consumable Fuels |
14% |
| Automobile and Auto Components |
10% |
| Services |
10% |
| Construction |
8% |
| Chemicals |
6% |
| Metals and Mining |
6% |
| Power |
6% |
| Capital Goods |
4% |
| Healthcare |
4% |
| Telecommunication |
4% |
| Construction Materials |
4% |
| Fast Moving Consumer Goods |
2% |
| Media, Entertainment, and Publication |
2% |
| Forest Materials |
2% |
| Realty |
2% |
[Source: nseindia.com] Data updated as of 30 December 2024.
How Can You Invest in Axis Max Life Sustainable Yield Index through Policybazaar?
You can follow these simple steps to start your investments in the funds offering the Axis Max Life Sustainable Yield Index:
NOTE: Your personal information will remain secure and will only be used for customizing your plan.
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Provide Basic Information: Share your city, age, and other basic details to receive a plan that best suits your needs.
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Compare Plans: Review various plans based on their features, ratings, and performance to select the most suitable one.
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Choose the Axis Max Life Sustainable Yield Index: Look for the recommended investment options, like the Axis Max Life Sustainable Wealth 50 Index Fund that tracks the Axis Max Life Sustainable Yield Index.
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Click on "Invest Now": Click on the "Invest Now" button and follow the step-by-step instructions displayed on the screen.
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Complete KYC and Payment: Upload the required KYC documents and complete the payment process to finalize your investment.
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Receive Confirmation: Once the payment is successful, you will receive a confirmation message verifying your investment.
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