Aditya Birla Sun Life Mutual Fund launches Aditya Birla Sun Life ESG Fund – Check features

Aditya Birla Sun Life AMC Limited, a subsidiary of Aditya Birla Capital Ltd, launched the Aditya Birla Sun Life ESG Fund today. The ESG fund is an open-ended equity scheme investing in companies following the Environment, Social, and Governance (ESG) theme. The Fund will participate in ESG aligned existing and emerging opportunities, eliminate risky companies, and invest in high quality and sustainable growth compounders to generate better risk-adjusted returns.

The minimum application amount for this fund is set at Rs 500 and in multiples of Re 1 thereafter, during the New Fund Offer period. Investors can invest in this fund both through the SIP or lumpsum route. The NFO opens for subscription on December 04, 2020, and closes on December 18, 2020.

Aditya Birla Sun Life Mutual Fund has partnered with leading global ESG research provider ‘Sustainalytics’ for ESG scores and ratings which will be the filter for defining the investment universe. Each company will be scored on 3 pillars of ESG and non-conforming sectors will be excluded. This will further be screened basis fundamental analysis and financial parameters with a combination of top-down and bottom-up approaches. The fund will be market cap agnostic. Investors can invest in international securities adhering to ESG practices up to 35 per cent of the fund’s net assets

A. Balasubramanian, MD, and CEO, Aditya Birla Sun Life AMC said, “ESG has become increasingly important parameters of investment decisions worldwide, beyond the traditional financial factors. This has gained further importance after Covid-19, an insight that also our survey across 1600 plus respondents shows. The majority of respondents felt their attitude towards ESG in investment decision making had changed after the pandemic.” He further adds, “This is an important shift in mindset. ESG concept is at a very nascent stage in India and is widely unexplored, though it’s an established theme globally. With the Indian Government also emphasizing its ESG focus recently and global flows into ESG focused sectors and companies seeing a consistent increase, there is potential for this theme to play out secularly”.

Experts say historically ESG compliant companies have been found to be less risky, have better operational performance, and generated better returns too. The portfolio looks to benefit from rising flows into ESG compliant companies which increases the possibility of re-rating and augurs well for longer-term market performance. From large institutions to individual investors, there is a growing consideration of non-financial risks in investment decisions. ESG lens enables us to look beyond the traditional investment parameters to identify high quality socially responsible companies for investing.