ICICI Prudential ESG Fund- NFO
ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential 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 21st September, 2020 and will end on 5th October, 2020.
Investment Objective
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 making investments while incorporating other non-financial parameters like Environment, Social & Corporate Governance. Also known as sustainable investing, ESG investing encourages investments in those companies which follow the ESG theme wherein they take care of the following things:
Environmental empathy: Duty & responsibility towards the environment.
Social Responsibility: Relationships with internal & external stakeholders.
Corporate Governance: Efficiency,conduct & practices of the management.
Features
- The Fund will be investing 80-100% of its assets in the companies with strong ESG scores.
- The Fund can also invest in foreign companies with high ESG scores.
- The Fund aims to identify companies reflecting high strength & stability through their quality ESG practices.
- The selection of companies for the portfolio will be from the NIFTY 100 ESG universe.
- The Fund will avoid investing in companies with corporate governance issues or any other ESG related issues. It will avoid any investments in companies with product lines of alcohol, tobacco, weapons, etc.
Why invest in ICICI Prudential ESG Fund?
Reasons to invest in ICICI Prudential ESG Fund:
-Over the previous 5 years, Nifty 100 ESG (index for ESG compliant companies) has outperformed Nifty 50 by a significant margin of 1.7%.
- Poor ESG practices pose threats to the long term survival of companies. Investing in an ESG Fund could ensure exposures to only ESG compliant companies who will survive in the long run.
- ESG focused companies are expected to outperform non-ESG compliant companies in the long run.
- ESG Investments are less likely to be impacted by changes in regulations, taxes or restrictions imposed by authorities.
- ESG framework encourages companies to behave in a socially responsible manner,
- With frequent regulatory impositions by authorities to ensure ESG framework in place for the corporates, the non compliant companies could face tough times ahead.
Suitability
This scheme is suitable for investors who are -
- Interested in Long term wealth creation.
- Interested in investing in an equity scheme which invests in equity & equity related instruments of the companies defined as per the ESG theme.
Also Read: ICICI Prudential Freedom SIP Plan Details, Reviews, Calculator
Assets Allocation Pattern-
| Instruments | Maximum % of total assets (Indicative) | Minimum % of total assets (Indicative) | Risk Profile |
| Equity & Equity related instruments of companies as per ESG criteria | 100 | 80 | High |
| Other Equity and Equity related instruments | 20 | 0 | High |
| Debt and Money market instruments | 20 | 0 | Low to Moderate |
| Units that are issued by REITs and INVITs | 10 | 0 | Moderate to High |
| Preference shares | 20 | 0 | Moderate to High |
About the scheme-
| Name of the fund | ICICI Prudential ESG Fund |
| Fund launched by | ICICI Prudential Mutual Fund |
| Asset Management Company | ICICI Prudential Asset Management Company Limited |
| Type of scheme | An open ended equity scheme investing in companies determined based on the Environmental, Social and Governance (ESG) theme. |
| Investment Objective | The investment objective of the scheme is to generate capital appreciation over the long term through investments in diversified stocks identified under the ESG criteria. |
| Benchmark | Nifty 100 ESG TRI |
| Entry Load | Not Applicable |
| Exit Load | 1% of applicable NAV - If units are redeemed or switched out within 12 months. Nil - If units are redeemed or switched out after 12 months. |
| Minimum Application Amount | Rs. 5,000 & in multiple of Rs.1 thereafter |
| Minimum Additional Amount | Rs. 1,000 & in multiple of Rs.1 thereafter |
| STP & SWP | Available |
Capital Appreciation STP SIP Plus SIP Pause | Available |
| Plans Available |
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| Options |
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| Fund Managers | Mr. Mrinal Singh and Ms. Priyanka Khandelwal (for overseas investments) |
SIP Details
| Type | Minimum Installments | Minimum Amount |
| Daily, Weekly, Fortnightly & Monthly | 6 | Rs.100 & in multiple of Rs.1 thereafter |
| Quarterly SIP | 4 | Rs. 5000 & in multiple of Rs.1 thereafter |
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