There are 8 ESG Mutual Funds available in the market right now. Three NFOs (New Fund Offers) are also open for subscription.
These days fund managers and investment advisors are talking a lot about ESG funds. ESG stands for Environment, Social and Governance. ESG funds invest in companies that meet high standards of environment, society and governance. Can investing in ESG theme be beneficial for you?
There are 8 ESG Mutual Funds available in the market right now. Right now three NFOs (New Fund Offers) are also open for subscription. The two recently launched NFOs are SBI International Access-US Equity FOF and HSBC Global Equity Climate Change Fund of Funds to be managed in a passive manner. Both these schemes will invest in funds focusing on ESG.
The top 10 holdings in the portfolio of most ESG schemes include HDFC Bank, TCS, Infosys and Kotak Mahindra.
| Scheme name | HDFC Holding (%) | TCS Holding (%) | Infosys Holding (%) | Kotak Mahindra Bank Holding (%) |
| Aditya Birla SL ESG Fund | 8.91 | 4.08 | 8.86 | – |
| Axis ESG Equity Fund | 6.81 | 7.35 | – | 6.88 |
| ICICI Pru ESG Fund | 8.84 | 4.85 | 6.41 | 5.94 |
| Kotak ESG Opportunities Fund | 3.08 | 5.84 | 5.07 | – |
| Quant ESG Equity Fund | 6.60 | |||
| Quantum India ESG Equity Fund | 4.24 | 4.33 | 4.88 | 3.09 |
| SBI Magnum Equity ESG Fund | 8.48 | 5.60 | 9.44 | 3.39 |
Most ESG funds do not have a long-term record. The reason is that it has been launched in the last 10 months.
| Scheme name | 1 Month Return (%) | 3 months return (%) | 6 months return (%) | One Year Return (%) |
| Quant ESG Equity Fund | 4.84 | 18.56 | – | – |
| SBI Magnum Equity ESG Fund | -0.74 | 13.01 | 31.28 | 29.60 |
| Mirae Asset ESG Sector Leaders FOF | -0.31 | 11.51 | – | – |
| Axis ESG Equity Fund | 0.21 | 10.75 | 29.54 | 39.66 |
| ICICI Pru ESG Fund | 0.17 | 8.72 | – | – |
| Aditya Birla Sun Life ESG Fund | 0.09 | – | – | – |
| Quant ESG Equity Fund | – | – | 6.60 | – |
| Kotak ESG Opportunities Fund | 0.82 | – | – | – |
| S&P BSE 100 TRI – Benchmark | 0.80 | 13.33 | 32.88 | 34.92 |
growing number of socially responsible investors consider ESG to be an important aspect. However, thematic funds such as ESG can be quite risky. These are suitable for investors who can take more risk. They should be invested keeping in mind the duration of at least 7 years.
