Aditya Birla Sun Life ESG Fund NFO
ABSL Mutual Fund has announced the launch of Aditya Birla Sun Life ESG Fund. The scheme would be investing in companies that adopt the theme of Environment, Social, and Governance (ESG). As per the press release, a composite ESG score based on different factors will be assigned to companies, and exposures will be taken in companies on the basis of their ESG scores.
The New Fund Offer (NFO) starts from 04 December 2020 and will end on 18 December 2020.
The investment objective of the scheme is to provide long-term capital appreciation by investing in a diversified basket of stocks. Investments are determined on the basis of the Environmental, Social, and Governance criteria (ESG).
What is ESG Investing?
ESG investing is looking beyond the traditional financial parameters while investing and choosing high quality socially responsible companies for investments.
Also known as sustainable investing, ESG investing encourages investments in companies following the ESG theme wherein-
Environmental impact: Companies following environment-friendly practices in their business conduct.
Social Responsibility: Companies that maintain a healthy relation with it's internal & external stakeholders.
Corporate Governance: Transparent conduct & practices of the management.
- The Fund will invest 80% of its assets in equity & equity-related securities.
- The scheme can also invest up to 35% of its assets in foreign securities.
- The Fund aims to identify ESG compliant companies with high growth potential.
- The fund will aim to build a market capitalization agnostic portfolio by investing 60-80% of its assets in Large-cap stocks & the rest in midcap & small caps.
- The fund's portfolio will exclude stocks of non-conforming sectors & companies producing goods like tobacco, weapons, etc.
- The fund will have a focussed portfolio of 40-50 stocks.
- The scheme will follow a blend of Bottom-up & Top-down approaches for building the portfolio.
Why invest in ABSL ESG Fund?
Reasons to Invest in ABSL ESG Fund:
- Historically, Nifty 100 ESG which is a benchmark index for ESG compliant companies has outperformed Nifty 50 by significant margins and generated higher risk-adjusted returns with lower volatility.
- ESG investing is a well-established theme globally. However, the concept of ESG investing is evolving and widely unexplored in India. This presents an opportunity to invest in an ESG themed Fund which can offer potential good returns.
- ESG compliant companies usually have sustainable business models, robust financials backed by strong corporate governance practices. This can help to generate good returns along with leaving a positive societal impact.
- A large flow of investments in the ESG space in the last few years has been encouraging companies to behave in a socially responsible manner.
This scheme is suitable for investors with a high-risk appetite who are -
- Interested in capital appreciation over the long term.
- Interested in investing in an equity scheme which invests in equity & equity-related securities of the companies following the ESG theme.
Assets Allocation Pattern-
|Instruments||Minimum % of total assets (Indicative)||Maximum % of total assets (Indicative)||Risk Profile|
|Equity & Equity related securities of companies following the ESG criteria||80||100||High|
|Other Equity and Equity related securities||0||20||High|
|Debt and Money market instruments (including MF units of debt & liquid schemes)||0||20||Low to Moderate|
|Units that are issued by REITs and INVITs||0||10||Moderate to High|
About the scheme-
|Name of the fund||Aditya Birla Sun Life ESG Fund|
|Fund launched by||Aditya Birla Sun Life Mutual Fund|
|Asset Management Company||Aditya Birla Sun Life AMC Limited|
|Type of scheme||An open-ended equity scheme investing in companies selected by following the Environmental, Social, and Governance (ESG) theme.|
|Investment Objective||The investment objective of the scheme is to generate capital appreciation over the long term by investing in a diversified portfolio of stocks following the ESG theme.|
|NFO Period||04 December - 18 December 2020|
|Benchmark||Nifty 100 ESG TRI|
|Entry Load||Not Applicable|
1% of applicable NAV - If units are redeemed or switched out within 90 days of allotment.
Nil - If units are redeemed or switched out after 90 days of allotment.
|Minimum Application Amount||Rs. 500 & in multiples of Rs.1 thereafter during NFO.|
|STP & SWP||Available|
|Fund Managers||Mr. Satyabrata Mohanty and Mr. Vinod Bhat(for overseas investments)|
|Type||Minimum Installments||Minimum Amount|
|Weekly SIP||6||Rs.500 & in multiple of Rs.1 thereafter|
|Monthly SIP||6||Rs. 500 & in multiple of Rs.1 thereafter|