NFO Update: Axis ESG Equity Fund

Axis Mutual Fund, with Assets under Management (AUM) of about Rs 1.2 lakh croreat the end of December, 2019 has come out with its New Fund Offer (NFO).  The fund house has launched Axis ESG Equity Fund. The NFO opens on January 22, 2020 and continues till/from to February 05, 2020. The investing style of the fund will be mostly large-cap and growth-oriented.

Objective: The fund’s objective is to generate long-term capital appreciation by investing in companies demonstrating sustainable practices across Environment, Social and Governance (ESG) theme. This does not mean that the traditional investment parameters such as growth and valuation will be ignored. ESG will be over and above criteria for companies to be a part of this fund.

Strategy: The Fund will invest in a diversified basket of equity stocks. What is unique about the investment process is that instead of ‘output’, the fund will take ‘input’ as forward-looking criteria for investment in a company. The investment will be made based on the forward-looking and dynamic view of ESG for individual companies. Once  a company becomes part of the fund, it will be periodically reviewed on the above criteria for being a part of the fund. Even those companies can be a part of the fund that is witnessing rapid improvement in the above criteria. Although, the fund house will be using its proprietary investment method, they will be helped by the Schroders, a British multinational asset management company with an expertise.

The scheme’s asset allocation mix will be a mix, 70 per cent in Indian companies and 30 per cent will be invested in companies outside India.

Interest in ESG analysis has been growing rapidly around the world. In India, there are a couple of funds launched with the same theme.

Fund Manager: The new scheme will be jointly managed by Jinesh Gopani, Head-Equity and Hitesh Das, Fund Manager – Foreign Securities. The performance of the scheme will be benchmarked against Nifty 100 ESG TRI.