ESG Funds – To Consider
ESG stands for:
The company which is doing good & are keen to keep this process on-going in the future will be compliant with ESG. These funds are portfolios that invest in bonds and equities of companies that are based on Environmental, Social & Governance factors. Also, ESG factors provide insights into the quality of company’s culture, risk-profile, management, and characteristics.
Thinking to invest in companies which are environmental conscious, and have sustainability agendas? ESG funds are the best pick for you.
A Bit More about ESG Funds:
- The ‘E’ of ESG: E here stands for Environment that aim towards conservation and preservation of natural resources. India is getting serious and protective about the environment around the factories & work-places which are quite impacted by rules & regulations and have the possibility to shutdown the process. Basically, it’s about adopting green work-force and keeping environment safe, especially for the future generations.
- The ‘S’ of ESG: S here stands for Social. To the majority, the core of every business are its people & companies that are developed socially treat their employees with care and respect of their well-being; like, measures against hazards, fair-treatment of all genders, employee safety, etc. Apart from improving the overall work-structure socially; these companies also extend their goodwill to different socio-economic causes with the mean of CSR initiatives.
- The ‘G’ of ESG: G here stands for Governance; here, the company is judged by keeping governance at the base. To simplify, it means when coming to financial disclosures, the company is transparent and ethical & can uphold the high standards of governance frequently. After all, taking the governance seriously, they are not affected by any regulatory reforms, no matter how tedious it can be. Investing in these companies can turn out to be quite safer.
ESG and the Concept of Indian Market
Talking about India and Asia, the growth in India is being rising with the interest in sustainability can be due to various factors, here:
- Push Factors: Factors like regulatory requirements that includes mandatory business requirements are considered as push factors.
- Pull Factors: Inclusions in these factors are phenomena such as: an increase in foreign investor interest. Also, foreign institutional investors are moving their portfolios increasingly towards companies having sustainable businesses.
ESG Funds in India (source: groww.in)
- Quantum India ESG Equity Fund: It is an equity mutual fund scheme that was launched by Quantum mutual fund. Later on, it was introduced on 12th July 2019 to its investors. Currently, the fund is managed by Chirag Mehta. Talking about AUM, it is of INR 14 Cr, and the latest NAV is of INR 8.91 (dated as of 12th March 2020). The fund growth is rated high risk. Also, the minimum SIP investment is INR 500.
- SBI Magnum Equity ESG Fund: It is an equity mutual fun scheme that was launched by SBI mutual fund. Later on, it was introduced on 1st Jan 2013 to its investors. Currently, the fund is managed by Rama Iyer Srinivasan. Talking abut AUM, it is of INR 2637, and, the latest NAV is of INR 97.66 (dated as of 12th March 2020). The fund growth is rated high risk. Also, the minimum SIP investment is INR 500, and, lumpsum investment is INR 1000. Not to miss, exit load of 1% only if redeemed within 1 year.
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