The environment, social and governance (ESG) theme is becoming popular among mutual funds.
After nine years, Quantum Mutual Fund is set to launch a new scheme - Quantum India ESG Equity Fund. NFO of the open-ended scheme will be open for subscription from June 21 to July 5.
Quantum MF’s ESG fund will be the second such fund in India after SBI Magnum Equity ESG Fund. BNP Paribas MF has also filed offer document with SEBI to launch an ESG Fund.
Industry experts feel with a slew of Indian companies facing corporate governance issues, and growing focus on climate change, ESG has acquired new significance.
Scheme details
Quantum MF’s ESG Equity Fund will primarily invest in companies listed on Indian stock exchanges, after evaluating their ESG practices.
ESG funds invest with a philosophy that if a company adheres to ESG norms, it is likely to have higher profitability, higher valuation, lower tail risks and less systematic volatility.
Chirag Mehta, Senior Fund Manager – Alternative Investment, Quantum AMC, will manage this fund. Mehta specializes in alternative investment strategies. He currently manages four funds largely in the field of alternative investments that includes Gold Fund, a Multi asset fund and an equity fund of funds.
Mehta said, “Quantum’s ESG Fund will be the first such fund in India that will rely on in-house research to evaluate the ESG compliance score of a company.”
He added that for this scheme Quantum MF has zeroed-in around 100 stocks that are liquid and have a good ESG score. The fund’s portfolio will typically have stocks of 40-60 companies.
Mehta also said that although this will be listed as a thematic fund according to SEBI norms, the fund should be seen as a multi-cap fund.
Asset allocation
|
Category |
Allocation range Min-Max% |
Risk profile |
Investment rationale |
|
Equity and equity related instruments of companies following ESG criteria |
80-100 |
High |
ESG compliance; Value agnostic |
|
Money market instruments and liquid schemes of MFs |
0-20 |
Low |
Liquidity management |
Key features -
|
Benchmark |
Nifty 100 ESG Total Return Index |
|
Type of Scheme |
Open-ended |
|
Investment style |
Actively managed |
|
Plans available |
Direct plan and Regular plan: Growth option |
|
Exit load |
|
|
Fund managers |
|
