Interest in ESG (Environmental Social and Governance) analysis has been growing rapidly around the world and in India also it has evoked alot of interest.
To tap this surge in interest, Axis Mutual Fund will be launching Axis ESG Equity Fund on January 22, which will remain open until February 5, the fund house announced on January 20.
Currently, SBI Mutual Fund and Quantum Mutual Fund offer this scheme.
The open-ended multicap scheme will be investing in companies demonstrating sustainable practices across environment, social and governance theme. The scheme will invest up to 30 percent in global sustainable companies.
The scheme will exclude sectors/themes that are deemed harmful from a societal perspective. For instance, exclude tobacco, liquor and defence stocks.
The ESG framework provides investment managers with a tool to capture these issues in a comprehensive manner and the framework is used by investment managers to identify how each company in their coverage is exposed to or are reacting to ESG factors.
The fund will be managed by head of equities Jinesh Gopani, and Hitesh Das, who will manage investments in foreign securities.
The minimum investment in the fund is Rs 5,000 and in multiples of one rupee thereafter and the fund will be benchmarked against Nifty 100 ESG TRI Index.
"By combining ESG analysis with traditional financial metrics, we can come up with a more holistic understanding of each company in our portfolio," said Chandresh Kumar Nigam, Managing Director and Chief Executive Officer, Axis Mutual Fund.
The Nifty100 ESG Index has outperformed the Nifty50 Index in the last 8 years.
From 2011-2019, Nifty100 ESG Index Fund delivered 14.5 percent returns while Nfity 50 Index gave 12.9 percent.