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Aditya Birla Sun Life AMC, an investment manager to Aditya Birla Sun Life Mutual Fund, has launched of ESG Fund that will învest in companies following Environment, Social and Governance theme.
The NFO will be open for subscription between December 4 and 18.
The minimum application in the fund is ₹500 during the New Fund Offer period.
The Fund endeavours to participate in ESG aligned existing and emerging opportunities, eliminate risky companies and invest in high quality and sustainable growth compounders to generate better risk adjusted returns. The fund will also invest up to 35 per cent in international securities adhering to ESG practices.
The fund house had partnered with leading global ESG research provider ‘Sustainalytics’ for ESG scores and ratings which will be the filter for defining the investment universe.
Non-conforming sectors like Cluster Munitions, Anti-Personnel Mines, Chemical and Biological Weapons, Coal & Tobacco etc to be excluded.
This will further be screened basis fundamental analysis and financial parameters with a combination of top-down and bottom-up approach. The fund will be market cap agnostic.
Nascent but less risky
A Balasubramanian, Managing Director, Aditya Birla Sun Life AMC, said the concept of ESG is at a very nascent stage in India and is widely unexplored, though it is an established theme globally.
With the Indian Government, too, emphasising its ESG focus recently and global flows into ESG focused sectors and companies seeing consistent increase, there is potential for this theme to play out secularly, he said.
Historically, ESG-compliant companies have been found to be less risky, have better operational performance and generated better returns too. The portfolio looks to benefit from rising flows into ESG compliant companies.
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