Necessity is the mother of invention and the same holds true for industries too. In order to gain a dominant position in the marketplace, it is necessary for industries to innovate. Such innovative companies are often the ones that gain a competitive advantage in their respective fields and generate value for stakeholders. This innovation can occur in any sector be it information technology, telecom, financial services or automotive.
What about becoming a part of it and capitalize on such growth stories? One way to take advantage of this innovation is the Axis Max Life Smart Innovation Fund.
What is the Axis Max Life Smart Innovation Fund?
The Axis Max Life Smart Innovation Fund is an actively managed equity fund that will primarily invest in innovative companies. Since innovation is not restricted to a single sector or market-cap, this fund will provide investors with an opportunity to diversify investments in a sector and market-cap agnostic manner.
The primary goal of this fund will be to create long-term wealth for investors through a portfolio of investments made in innovative companies that have the capability to reshape their chosen sectors. Such innovative companies have historically delivered unmatched growth across a wide range of industries ranging from telecommunications and Information technology to Energy and Biotechnology.
Axis Max Life Smart Innovation Fund Snapshot
| Fund Name | Axis Max Life Smart Innovation Fund |
| Fund SFIN | ULIF03301/03/25INNOVATION104 |
| Investment Objective | The fund will focus on investing in innovative companies and businesses benefitting from the evolving innovation eco-system with the objective to generate long-term capital appreciation. |
| NFO Period @ Rs. 10/unit | 5th to 20th March 2025 |
| Benchmark | NSE Nifty 500 TRI |
| Risk Profile | Very High |
| Asset Allocation | Equities: 70-100% Cash & Money Market Instrument: 0-30% Government Securities & Debt: 0-30% |
Benefits of Investing in the Innovation Theme
There are various benefits of pursuing the innovation theme when it comes to selecting investments. Some of these investment benefits include:
- Diversification across market cap
- Diversification across industries and sectors
- Investment opportunity in emerging businesses and technology
- High long term growth potential and value creation
Apart from the above, as the Axis Max Life Smart Innovation Fund will be provided as part of Axis Max Life ULIP Plans such as Axis Max Life Flexi Wealth Advantage Plan, life cover will available to investors. Additionally, benefits available with Axis Max Life ULIPs such as cover continuance benefit, unlimited free fund switching, choice between different investment strategies based on appetite, etc. will also be available to new and existing investors.
Decoding the Selection Criteria of Axis Max Life Smart Innovation Fund Stocks
Since Axis Max Life Smart Innovation Fund is an actively managed fund, the fund manager and in-house research team will use 3 key criteria to pick stocks for inclusion into the fund portfolio. These 3 criteria for selection of suitable innovative companies are:
Commitment: This is used to determine the overall effort that the company puts into pursuing innovation and the importance of such efforts in its strategic outlook. Companies that vigorously support research into innovation efforts are better placed to develop a breakthrough innovation that reshapes their chosen business.
Influence: This factor attempts to gauge the potential influence that the innovation introduced by a company can influence their chosen sector and the broader market. Companies that can generate greater influence on their peers and the broader market by implementing innovations are better placed to emerge as an innovation leader and superior long-term value for investors versus peers.
Originality: This is used to estimate the uniqueness that a company’s innovation brings and its potential ability in creating disruptive technologies. The ability of a company to introduce novel techniques to solve existing challenges give such companies a competitive edge over their competition. Such trend-setter companies have the potential of creating high long-term returns.
These 3 criteria form the core of the fundamental assessment that the Axis Max Life research team will make to identify and pick innovative stocks for inclusion into the fund portfolio.
Methodology and Stock Selection Process for the Axis Max Life Smart Innovation Fund
The benchmark of the Axis Max Life Smart Innovation Fund is the broad based NSE Nifty 500 TR Index, which also serves as the stock universe for this fund. Below are steps involved in picking innovative companies from this multi-cap stock universe:
Step 1. The Axis Max Life in-house team of researchers identifies top companies based on the commitment, influence and originality parameters mentioned above. This serves to identify the innovation capabilities of companies that are part of the stock universe of the fund.
Step 2. After top innovators have been identified by the in-house research team, the valuation parameters, fundamental assessment and growth potential of the companies is integrated with their innovation capabilities.
This step takes into account a range of traditional financial health indicators such as profit margins, revenue growth, leverage, etc. to provide a more holistic assessment of innovative company stocks and their ability to provide long-term growth.
Step 3. Finally, companies that excel at both innovation and traditional performance metrics are selected for inclusion into the portfolio of the Axis Max Life Smart Innovation Fund. By maintaining a balance between these two performance aspects, the fund will attempt to create a diversified portfolio of stocks that not only excel at innovation but also have the potential to deliver long-term growth to the investors.
What’s more, companies with strong fundamentals and solid financials are also better placed to withstand market downturns that can provide much needed downside protection to investors during bearish market conditions.
Which Sectors Will the Axis Max Life Smart Innovation Fund Invest in?
While the Axis Max Life Smart Innovation Fund will pick stocks from the broad-based Nifty 500 Index that features a multi-cap orientation, this fund is expected to provide investors with access to a wide range of unique as well as emerging themes and industries. Key examples of such themes and industries/sectors to which this fund can provide exposure include:
- New age companies capable of disrupting traditional business models
- Artificial Intelligence and Big Data companies operating across industries
- Companies introducing smart manufacturing innovations
- Fintech and Financial Services companies focusing on block chain technologies, digital payments, etc.
- Renewable/Green Energy companies and companies focusing on sustainability solutions such as smart-grids, etc.
- Companies engaged in cutting edge innovations in the fields of biotechnology, genomics, personalised medicine, etc.
The above list of potential sectors and industries have been provided for illustrative purposes only and the Axis Max Life Smart Innovation Fund may invest in additional industries based on the recommendations of the in-house research team and fund manager’s conviction.
Potential Risks of Investing in the Axis Max Life Smart Innovation Fund
To make an informed decision whether the Axis Max Smart Innovation Fund is a suitable investment option for you, a clearer understanding of the potential risks associated with this investment also need to be considered. Below are some key risks associated with this investment:
Higher Volatility – Innovation companies can be prone to higher volatility than broader markets in the short-term as they are often part of emerging markets and industries that are yet to solidify their position in the marketplace.
Limited Track Record – A majority of innovations have historically occurred in emerging sectors, which have a relatively short track record. This can make it difficult to accurately estimate their potential for future growth.
Concentration Risk – Even if all listed companies are taken into account, innovative companies tend to be relatively small in number. Hence the portfolio of innovation funds may be prone to a high degree of concentration risk.
Fund Manager Bias – In the case of actively managed equity funds, the fund manager and research team play a crucial role in stock selection. This enhances the potential risk of fund manager bias in the case of these funds.
Market Risk – Market linked investments such as equities feature inherent market risk. This holds true even for diversified equity funds based on the innovation theme.
Now that you have a clearer idea of the potential risks associated with investing in this fund, let’s take a closer look at which types of investors would benefit from this investment.
Who Should Consider Investing in the Axis Max Life Smart Innovation Fund?
Since Axis Max Life Smart Innovation Fund is an actively managed equity-oriented fund, it is designated as a high risk investment and might not be suitable for all groups of investors. Below are some key types of investors who may consider investing in an actively managed fund based on the innovation theme:
- Investors with high risk appetite seeking to make equity-oriented investments
- Individuals seeking potentially long-term gains that outperform broader markets
- Investors who are seeking to diversify their current investment across market capitalisations and industries
- Individuals looking for exposure to emerging businesses and themes that might be not be accessible through other instruments
The above list of investor groups who might benefit by investing in the Axis Max Life Smart Innovation Fund are illustrative and there can be additional investor groups who can benefit from this fund.
Other Actively Managed Funds from Axis Max Life Insurance
The newly-launched Axis Max Life Smart Innovation Fund is not the only actively managed fund that Axis Max Life currently offers to investors. Here’s a closer look at some of the other actively managed funds currently on available to Axis Max Life ULIP investors:
Max Life Growth Super Fund
The Max Life Growth Super Fund is an equity fund that primarily focuses on making large-cap stock investments and is required to maintain at least 70% exposure to equities at all times. The remaining assets of the fund accounting for up to 30% of its assets may be invested in debt instruments such as Government Securities, corporate bonds and money market papers. This actively managed fund was launched almost 18 years back in May 2007 and has received a 4 Star rating from Morningstar in January 2025. Below is a snapshot of this fund’s performance versus its benchmark, the NSE Nifty 100% as of 31 January 2025:
| Fund/Benchmark Index | 3 Year Returns | 5 Year Returns | Returns Since Inception |
| Growth Super Fund | 12.76% | 15.65% | 12.27% |
| NSE Nifty 100% | 10.67% | 14.45% | 10.12% |
Note: The returns shown above are CAGR returns. Above fund returns are after deduction of fund management charges (FMC).
Max Life High Growth Fund
Launched in February 2008, the Max Life High Growth Fund is one of the oldest actively managed funds of Axis Max Life Insurance and it has received the highest rating of 5 star from Morningstar in January 2025. Benchmarked against the Nifty Midcap Free Float 100% Index, this fund primarily focuses on investing in potentially high growth mid-cap companies while maintaining an overall multi-cap orientation. Apart from the mandatory 70% equity allocation, the fund has the option to invest up to 30% of its assets in government securities, corporate bonds and money market instruments. The below table highlights the performance of this fund versus its benchmark as on 31 January 2025:
| Fund/Benchmark Index | 3 Year Returns | 5 Year Returns | Returns Since Inception |
| High Growth Fund | 23.22% | 27.12% | 15.04% |
| Nifty Midcap Free Float 100% | 21.04% | 24.04% | 10.11% |
Note: The returns shown above are CAGR returns. Above fund returns are after deduction of fund management charges (FMC).
Max Life UL Life Diversified Equity Fund
This actively managed diversified equity fund was launched almost 5 years back in June 2020 and it has received the highly coveted Morningstar rating of 5 Star in January 2025. The Diversified Equity Fund primarily invests in large and mid-cap companies in a sector agnostic fashion with the aim of providing long term growth opportunities to its investors. Apart from a minimum 70% equity allocation this fund also has the flexibility to invest up to 20% of assets in Government Securities and Corporate Bonds. Alternatively, up to 30% of fund assets may be invested in Money Market Instruments or equivalent. Below are the returns of this scheme vs its benchmark, the NSE Nifty 200 TRI as of 31 January 2025:
| Fund/Benchmark Index | 3 Year Returns | 4 Year Returns | Returns Since Inception |
| Diversified Equity Fund | 17.30% | 19.78% | 25.13% |
| Nifty 200 TRI | 12.47% | 16.55% | 21.56% |
Note: The returns shown above are CAGR returns. Above fund returns are after deduction of fund management charges (FMC).
As you can see from above, these actively managed funds from Axis Max Life Insurance have outperformed their chosen benchmark indices over various time periods. While past performance does not guarantee that the same level of performance will be maintained in the future, the newly introduced actively managed Axis Max Life Smart Innovation Fund does have an edge. The new fund is well-placed to leverage the long-term active fund management experience of Axis Max Life fund managers and analysts enabling it to outperform its benchmark and potentially provide unmatched long-term capital appreciation to investors.
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