Axis Max Life Insurance has launched a market-linked equity fund that will be available through its unit-linked insurance plans (ULIPs), positioning it as a long-term wealth creation option for investors willing to take higher risk. The launch underscores how insurers are sharpening their investment offerings amid rising retail interest in equities.
According to a press release issued via PTI, the company has introduced the ‘Diversified Equity Fund II’, an actively managed fund designed to generate long-term returns through a multi-cap investment strategy.
What the new fund offers
The fund builds on the insurer’s existing diversified equity strategy and seeks to spread investments across sectors and market capitalisations to reduce concentration risk.
Key features highlighted in the PTI-sourced release include:
Active management: Managed by an in-house investment team with a record of benchmark outperformance.
Sector diversification: Allocation spans financial services (24.6 per cent), infrastructure (11.2 per cent), pharmaceuticals (6.6 per cent), among others.
ESG integration: Incorporates environmental, social and governance factors through proprietary scoring.
Multi-cap approach: Exposure across large, mid, and smallcap stocks to balance growth and stability.
Sachin Bajaj, executive vice-president and chief investments officer of Axis Max Life Insurance, said the strategy is aimed at capturing opportunities across market cycles while managing concentration risks, according to PTI.
Who is managing the fund
The insurer has not disclosed a single named fund manager for the new fund. Instead, it will be handled by its in-house investment team, led by the chief investments officer, with research inputs from internal analysts. This team-based approach is typical in insurance-managed funds, where portfolio decisions are often driven by a central investment committee rather than an individual fund manager.
For investors, this means performance attribution may be less transparent compared to mutual funds, where fund managers are publicly identified and track records are easier to evaluate.
Available only through ULIPs
The fund is not available as a standalone investment product. It can be accessed only through ULIPs such as the Online Savings Plan, Online Savings Plan Plus, Flexi Wealth Advantage Plan, and Smart Term with Additional Returns ULIP.
This structure combines:
Life insurance protection, and
Market-linked equity exposure
Key risks to consider
While positioned as a long-term wealth product, the fund carries several layers of risk that investors should assess carefully:
Market risk (high)
Being an equity-oriented, multi-cap fund, returns are directly linked to stock market performance. Short-term volatility can be significant, especially due to mid- and small-cap exposure.
Product structure risk
ULIPs bundle insurance and investment, which can reduce flexibility. Exiting early (before five years) can lead to penalties and loss of benefits.
Cost drag
Multiple charges, such as mortality, policy administration and fund management fees, can erode returns, particularly in the initial years.
Manager risk
Since the fund is managed by a team rather than a publicly trackable individual, evaluating consistency and accountability becomes more complex.
Liquidity constraints
The mandatory five-year lock-in limits access to funds, making it unsuitable for short-term financial needs.
What it means for investors
From a personal finance standpoint, the launch reflects the continued push by insurers to position ULIPs as long-term investment vehicles.
Investors should evaluate:
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Whether they need insurance and investment bundled together -
Their time horizon (ideally 10 years or more) -
Their ability to withstand equity market volatility
While ULIPs have become more transparent after regulatory changes, financial planners often still recommend a “buy term, invest separately” approach for greater flexibility and cost efficiency.
Who should consider it
According to the PTI release, the fund may suit:
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Investors with a high risk appetite -
Those targeting long-term capital appreciation -
Individuals comfortable with market-linked returns
Investors seeking diversified, professionally managed exposure