ESG, short for Environmental, Social and Governance, is a generic term for evaluating corporate behaviour. It is used interchangeably with sustainable, responsible, impact or ethical investment. The ICICI Prudential ESG Fund aims to offer a way to invest in companies that rank high on good ESG practices. This new fund offer closes on 5 October 2020. Here’s what the fund is all about.
Investment objective
Although a nascent practice, companies are rated on the basis of their adherence to ESG parameters. Some of the factors considered in these parameters are as follows.
- Environmental empathy: Efficiently disposing waste, reducing pollution
- Social responsibility: Women empowerment, gender diversity
- Corporate governance: Ethical practices, efficient management, no fraud/illegal activities
As per the NSE, ESG-focused companies show better growth which translates into better wealth creation for investors. As per the exchange, between August 2011 and August 2020, an investment of ₹100 in the NIFTY 100 ESG index** yielded growth of ₹126. In comparison, the NIFTY 50 yielded ₹98. The ICICI Prudential ESG Fund attempts to leverage the better returns associated with companies that follow the ESG theme, in addition to offering a way to invest responsibly.
Click here to invest in this NFO
Asset allocation
| Instrument | Indicative Allocations (% of total assets) | Risk Profile | |
| Minimum | Maximum | ||
| Equity & Equity related instruments of companies following Environmental, Social and Governance (ESG) criteria | 80 | 100 | High |
| Other Equity and Equity related instruments | 0 | 20 | High |
| Debt and Money market instruments, Units of Debt oriented mutual fund schemes and term deposits (margin money) | 0 | 20 | Low to medium |
| Units issued by REITs and INVITs | 0 | 10 | Medium to high |
| Preference shares | 0 | 20 | Low |
Scheme details
| Name | ICICI Prudential ESG Fund |
| Type | Mutual Fund |
| Category | Large-cap fund |
| Investment objective | To generate long-term capital appreciation by investing in a diversified basket of companies identified based on the Environmental, Social and Governance (ESG) criteria |
| Benchmark | Nifty 100 ESG TRI** |
| Entry/Exit Load |
|
| Fund managers |
|
| Plans | Regular and Direct |
| Options (under each plan) | Growth & dividend |
| Minimum application amount | ₹5,000/- (plus in multiples of ₹1) |
| Additional application amount | ₹1,000/- (plus in multiple of ₹1) |
| Maximum total expense ratio | Up to 2.25% |
Click here to invest in this NFO
This scheme is suitable for investors who are seeking*
|
 |
*Investors should consult their financial advisors if in doubt about whether the product is suitable for them.
**The construct of NIFTY100 ESG indices results in a portfolio with similar sector exposure vis-à-vis NIFTY 100 (parent index), but with stock level ESG tilt. This results in a portfolio with higher weightage towards companies with better ESG performance. To read more, click here.
Note: The above information has been sourced from the Scheme Information Document provided by ICICI Prudential Asset Management Company Limited. To read the entire document, click here.
Disclaimer
RKSV Securities India Private Limited (ARN/Distributor - 107930; brand name Upstox) is the distributor of the mutual fund. Please consult your investment advisor before investing. Mutual fund investments are subject to market risks, read all scheme related documents carefully.
Download the Upstox App Today