What is ESG, Well ESG stands for Environmental, Social, and Governance (ESG) parameters are a set of principles that socially responsible investors use to screen prospective investments for the operations of a business? Environmental standards understand how a corporation works as a steward of nature. Social criteria analyze how it handles relationships with workers, vendors, clients, and the societies in which it works. Governance deals with the management, executive compensation, audits, internal controls, and shareholder rights of a business.
In recent years, investment firms and mutual fund companies have started selling exchange-traded funds (ETFs) and other financial products that meet ESG guidelines, as younger investors have shown an interest in placing their money where their values are. They have also been used by Robo-advisors like Betterment and Wealthfront to cater to these investors. Several mutual funds, investment companies, and Robo-advisors are now selling products that use ESG requirements. ESG standards may also help investors avoid businesses that because of their environmental or other policies, may pose a higher financial risk.
Sustainable investment, responsible investment, impact investing, or socially responsible investment are often referred to as ESG investing.
Fund houses argue that new investors are re-evaluating conventional approaches and are looking at the effect on the world of their investments. As a consequence of this paradigm shift, fund managers have begun integrating ESG variables into investment activities. Fund managers say that businesses will be pushed to pursue better governance, ethical standards, environmentally sustainable initiatives, and social responsibility as ESG funds gain traction in India. As many pension funds, sovereign wealth funds, etc. do not invest in businesses that are seen as polluting, do not practice corporate responsibility, or are tobacco companies, there has been a major change globally.
Companies offering ESG opportunity:-
There are currently three ESG schemes managing close to Rs 4,500 crore (two of which have been launched in the last 15 months), while new schemes have been lined up by at least five additional fund houses. In its ongoing NFO, ICICI Prudential Mutual Fund, which launched its ESG fund on 21 September, has already raised over Rs 500 crore. Now Kotak AMC has published its ESG Fund NFO and more will follow.
| Scheme | Benchmark Index | Corpus(Rs.cr) | Launch Date | NAV |
| Axis ESG Equity Fund- Growth | NIFTY 100 TRI | 1729.22(31/10/2020) | 12th Feb 2020 | 12.77(19 Nov2020) |
| ICICI Prudential ESG funds Reg-Growth | NIFTY 100 TRI | 1456.82(31/10/2020) | 9 Oct 2020 | 10.60(19 Nov 2020) |
Kotak MF is the first AMC in India to Sign the United Nations Principle of Responsible Investment (PRI) ESG is already an integral part of Kotak’s investment process. Launching an Exclusive ESG fund based on the experience gathered in the ESG area.
Stage 1- No of listed stock in India:- 5004
Stage 2- Stock with market cap of > Rs. 1500cr: 516
Stage 3- No of stock under research courage: 350
Stage 4- Companies falling within the ESG ambit prudent policy, process & practice.
Selection- Around 40-60 Top stock on ESG score & Kotak BMV approach would be part of the portfolio.
|
Name Of the Fund |
Kotak ESG Opportunities Fund |
|
Scheme |
An open-ended equity framework according to the theme of Environmental, Social and Governance (ESG) |
|
Specification |
Nifty 100 ESG TRI |
|
Dates |
Opens on November 20, 2020, and closes on December 4, 2020 |
|
Minimum application amount /Purchase Amount |
Rs. 5,000 and in multiples of Re. 1 after that. |
|
Minimum additional Investment |
Rs. 1000/- and Rs 1 in multiples for acquisitions and Re. For switches, 0.01 |
|
Minimum Redemption Amount |
In Rs: Rs 1,000In Units: 100 unity |
|
Entry Load |
NIL |
|
Exit Load |
1%: if more units are redeemed/switched on or before 12 months from the unit allocation date NIL: If the units have been redeemed/switched 12 months after the date of allocation of the units: |
|
Plans |
Regular Plan and Direct Plan |
|
Options |
Growth and Dividend Option (Payout, Dividend Reinvestment Option) |
The popularity of ESG funds among investors who want to be seen as contributing to reducing global warming and contributing to human development is rising without losing financial returns.
So, What are you waiting for? Be a part of a sustainable investment moment.
To invest now click on this link:- https://bit.ly/39bop0P
To get the best SIP:- https://bit.ly/3lZvtRG
With Our diwali dhamaka offer you can grab an opportunity to start investing in stocks with a free Demat account (Offer is valid till 30th Nov). Get your free Demat account Click here.
Source:- Investopedia, KOTAK Mutual Funds ACE MS
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