What To Look In An ESG Fund Strategy? Friday, Sep 20, 2019
For every person, it is important to clearly and consciously craft an investment strategy based on his/her financial goals. Moreover, it is also crucial to mindfully create investments which can be passed on to the next generations.
Environmental, Social and Governance (ESG) investing is gaining popularity for two prime reasons. One is investing in quality stocks and second is investments that have a positive impact. Globally, ESG Investing has gained popularity and is growing rapidly. As of 2019, there are over 2300 signatories of United Nations Principles for Responsible Investing (PRI) with US$ 86 trillion as total assets under management. ~23% of these assets under management, which is close to US$ 20.1 trillion, is categorized as ESG Investment.*
In India, the investors are becoming increasingly conscious about their choices, especially their investment choices. The role on good governance has become a core of investment strategies. People have become more vocal in expressing their strong views related to social and environmental issues. By investing in an ESG Fund these factors can be incorporated in individual’s investment plan.
In the beginning, it can be challenging to identify and select an ESG Fund for a new investor. So, here are three main factors one should consider while selecting an ESG Fund:
•Asset Manager: Selecting an asset management company that has a simple and transparent vision, has a mission to create awareness among the investors, has an objective to provide low-cost funds to meet all kind of financial goals and lastly, has showcased commitment towards responsible investing. These values and commitments can be deduced from the points below.
•Dedicated ESG Research: “One size fits all” doesn’t work in case of ESG Investing. Presence of dedicated team of research analysts focusing solely on identifying ESG companies, researching on such companies and staying updated with the issues related to ESG is highly advantageous and preferred.
•Portfolio Selection and Construction Process: Stock selection based on in-house ESG research and models gives the ESG Fund its unique structure. In the portfolio, the weight of company should clearly reflect the quality of Company’s ESG compliance.
Quantum Mutual Fund checks out on all the three parameters. Quantum offers Quantum India ESG Equity Fund, an open-ended equity fund investing in companies following Environment, Social and Governance (ESG) theme. The novelty of this Fund is that the ideation of an ESG Fund started 4 years back and then a dedicated ESG research team was set up to deep dive into formalization of the ESG assessment and evaluation process. High liquidity in terms of average daily traded volumes and ESG disclosures formed the foundation for identifying the active research coverage. The in-house ESG research focuses on understanding into a company’s management practices, sustainable businesses and risk profile, which would thereby help in understanding the impact on long-term sustainability. A comprehensive research framework based on level of disclosures, quality of disclosures and peer assessment is used for building a well-diversified portfolio of the ESG Fund.
It is time that investors should consider broadening their assessment lens to include non-financial ESG factors along with financial factors while selecting their investments and invest in Quantum India ESG Equity Fund.Data Source: * United Nations Principles for Responsible Investing (PRI)
|Name of the Scheme||This product is suitable for investors who are seeking*||Riskometer|
|Quantum India ESG Equity Fund|
(An Open ended equity scheme investing in companies following Environment, Social and Governance (ESG) theme)
|• Long term capital appreciation |
• Invests in shares of companies that meet Quantum’s Environment, Social andGovernance (ESG) Criteria
Investors understand that their principal will be at High Risk
Disclaimer, Statutory Details & Risk Factors:
The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.
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Please visit – www.QuantumMF.com to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.