August 9, 2022

ICICI Prudential ESG Mutual FundICICI MF launches ESG Mutual Fund

ICICI Mutual funds has launched its new mutual fund scheme, ESG mutual fund. This mutual fund would invest in companies that have adopted Environment, Social and Governance criteria.

About ESG theme

This fund invests in ESG theme. Let us check what is ESG is all about.

ESG represents factors – Environmental (such as impact of business on natural resources), Social (such as a business, having undesirable social of the scheme impact) and Governance (being the way in which the company is run).

Investment objective of the fund

The investment objective of this ESG fund is to generate long-term capital appreciation by investing in a diversified basket of companies identified based on the Environmental, Social and Governance (ESG) criteria.

ICICI ESG Mutual Fund NFO issue details

Scheme opens – 21-Sep-20

Scheme closes – 5-Oct-20

Scheme again would open for further subscription after 5 working days.

One can invest a minimum of Rs 5,000 on lump sum and Rs 100 per month through SIP for 6 months.

One needs to pay 1% exit load if they wish to sell the mutual fund units within 1 year of purchase.

This mutual fund scheme is classified as HIGH RISK scheme.

Scheme benchmark is Nifty 100 ESG TRI.

Fund Managers are Mr. Mrinal Singh and Ms. Priyanka Khandelwal.

Where does this fund invest?

This fund would invest up to 80% in equity and related instruments of companies identified based on ESG criteria (Environmental, Social and Governance). It would also invest up to 20% in other stocks, debt and money market instruments and up to 10% in REITs/InvITs and preference shares.

Who can apply for this fund?

Indian residents, HUF, Partnership firms, companies etc., can invest in this mutual fund. Even NRIs can invest in this fund.

Performance of existing ESG Funds

There are a few funds already existing and investing on ESG category. Let us check the performance of these funds.

Quantum ESG fund gave 11.6% returns in last 1 year.

SBI Magnum Equity ESG fund gave 5.5% returns in last 1 year.

Axis ESG fund came in Feb-20 gave 17.8% returns in the last 6 months.

If you observe, there is a mixed performance as ESG is just evolving and it might take some time for fund managers too to select appropriate stocks for investments.

Should you invest in the ICICI ESG Fund?

ESG is evolving now in India. There were several scams in India in the past few years, hence investors are worried about investing their hard earned money. PNB, DHFL etc. has created panic to investors. Investors either worried to invest in stocks or FD or NCDs post DHFL scam. If investors are looking for good corporate governance companies for investments, they can select ESG funds and invest some part of their portfolio in such mutual funds.

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