ESG Equity Fund can add Value to your Investment

The world is succumbing to global warming a little every day. This has caught the attention of everyone across the globe, and efforts are being taken to contribute a little towards the betterment of our environment. Multinational companies, too, have realized the dire need to do their bit to make our world a better living place. Till few years, the mutual fund industry did not feature an investment product that analyzed a company based on environmental criteria such as the amount of waste it discharges, the amount of natural resources it consumes, and the amount of carbon it emits, etc. ESG in ESG funds stands for environmental, social, and governance.

Here’s a brief about all the three parameters:

The E in an ESG fund is the environmental parameter that indicates the energy a company consumes and the chemical waste it discharges, and the direct impact of this on human beings. It also comprises of carbon footprint and climate change. Every company needs to consume natural and perishable resources for its functioning, and the E in ESG fund lays its focus on this.

The S in ESG fund is the social parameter that throws light on the relationship an organization shares with the institutions and people it does the business with. An organization must maintain a commendable reputation in the eyes of both its internal and external stakeholders.

The G in ESG fund stands for the governance criteria. This parameter sheds light on the hierarchy within an organization, the policies and procedures a company adopts for self-governance, etc.

An ESG fund, as mentioned earlier, stands for Environmental, Social, and Governance. Nowadays, socially responsible investors are taking these non-financial factors into consideration while evaluating and shortlisting funds for investment purposes. Over the past few years, ESG has amplified from just being just a meager thought into a political priority across nations. ESG metrics are gaining popularity among investors to evaluate funds that are investing in socially responsible companies.

How can ESG Fund add value to your investment?

An ESG Fund invests in companies that are ESG complaint. ESG Companies, as the name suggests, are here to make a change. A change in how we perceive the environment, a change in the trade practices and the functioning of a company, and change in its internal and external communication practices. These firms stand clear on their objective of staying committed towards the environment by investing in companies that less likely to be penalized for their functioning in society. 

Axis has recently introduced Axis ESG Equity Fund to allow investors to not only seek some financial benefits but also become a bit responsible by investing in a fund that targets socially responsible companies. The fund intends invest approx 30% in global sustainable companies. It will invest directly in overseas securities with a focus on developed markets with a high level of ESG maturity. The scheme will exclude sectors/themes that are deemed harmful from a societal perspective, for example, of tobacco, liquor, defense stocks, etc. This product may be ideal for investors who are seeking capital appreciation over the long term and for those who wish to invest in companies demonstrating sustainable practices across Environment, Social, and Governance (ESG) parameters.

Here’s how investing in Axis ESG Equity Fund can add value to your investments:

• When you invest in Axis ESG Equity Fund, you are diversifying your mutual fund portfolio by investing in a socially responsible fund. You are not just investing for the primary purpose of creating wealth, but also because you care for the environment. Axis ESG Equity Fund is an open ended equity scheme investing in companies showcasing sustainable practices across Environment, Social, and Governance (ESG) theme.
• Axis ESG Equity Funds invests in environmentally sustainable companies; thus, there is very little chance of you making losses by investing in this fund.
• As the name suggests, the Axis ESG Equity Fund is an equity linked fund. This fund can be utilized to meet long term financial goals like retirement corpus or your child’s marriage and their future. That’s because historically, equity investments have performed better for the long run. Hence, this fund is ideal for investors seeking long term capital gains through equity investments.

No matter where you invest, make sure that you have a defined financial goal, and work towards it. New investors are always advised to invest within their boundaries and must stick to their investment strategy. Financial planning is not rocket science, but if need be, it is always good to get a financial planner on board to help you sort out your investments. If you want to witness your investments turn into a worthy corpus, invest regularly, and let your money do the hard work for you. Download Axis MF's investment app to start investing effortlessly and stay on track with your financial goals.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.