<p>Despite the growing relevance of intellectual capital, there is limited evidence on how intellectual capital can be integrated into fundamental indexation frameworks in emerging markets. This study aims to fill this gap by examining the performance of intellectual capital sorted fundamental indexation portfolio to that of capitalisation-weighted index portfolio in Indian securities market. It also investigates the return-generating characteristics of the intellectual capital sorted fundamental indexation portfolios using Fama-French factor models to measure the effectiveness and appropriateness of investment strategy. The results show that IC50 and its component portfolios perform better than capitalisation-weighted indices irrespective of holding period owing to substantial interventions in human capital, structural capital and capital employed contrary to the performance of ICN50 portfolios with lower intellectual capital interventions. Fama-French tests have attributed the superiority of IC50 portfolios to market and value factor, suggesting that intellectual capital-based sorting corrects the growth-bias inherent in CWIs through a price-neutral heuristic. The findings establish IC50 portfolios as a superior benchmark for computation of cost of endowment and evaluation of fund managers skills. These results can also help portfolio managers in portfolio rebalancing and fund allocation depending on the marginal contribution of the market, size, value and profitability premiums. These insights are very useful for fund managers and investors for various financial decisions.</p>