How to Invest in Axis ESG Equity Funds

News about global warming hits the news websites almost every day. There are stories about glaciers melting, deforestation, etc. which usually leaves a lot of individuals disheartened. Don’t you sometimes wish that you could do to contribute towards protecting our natural environment in some or the other way? Everyone wishes to do their bit to create a positive impact on our environment but might not know how or where to start. If you too feel like showing some commitment towards protecting your environment, now there’s a unique way to do it. You now have the liberty to invest in Axis ESG Equity Fund, a socially responsible fund offered by Axis Mutual Funds. But before we talk about how Axis ESG Equity Fund might help you invest in a sustainable future, let us find more about ESG.

What is ESG?

Environmental, social and governance are the three pillars of an ESG analysis. These three parameters might help an individual invest sustainably. ESG investing is a parameter-based approach to analyze and evaluate companies based on their obligations towards positive environmental, social and governance (ESG) business practices. ESG fundamentals might aid investors to assimilate non-financial, but useful info into their investment strategy. ESG funds usually filter companies with a more holistic approach and do not restrict their assessment to the business and economic morals of a company. ESG practitioners argue that companies that integrate ESG principles have the potential to enhance the reputation and goodwill of that company.

Three pillars of ESG

Weakness in ESG practices imposes a higher risk on businesses. Here are a few examples that detail the impact ESG has

Source: MSCI, Institute and Faculty of Actuaries

What is Axis ESG Equity Fund?

Axis ESG Equity fund (An open-ended equity scheme investing in companies demonstrating sustainable practices across Environment, Social and Governance (ESG) theme) 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, exclusion of tobacco, liquor, defence stocks, etc. This product may be suitable 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.

Invest in a sustainable future with Axis ESG Equity Fund

Axis understands that ESG analysis is necessary but not sufficient. It may not have strong growth prospects, competitive moats or high return ratios. Also, conventional ESG metrics and 3rd party sources provide useful information but have limited investment value. Qualitative assessments using a deep understanding of the company are key for ESG investing.

Companies with sustainability characteristics might be able to achieve structural growth and have better operational performance.

Axis only seeks quality companies that have the ability to generate sustainable growth. The fund house believes that only companies that run for the long term and companies who take account of their impact on all stakeholders may be able to sustain supernormal growth and returns.

ESG is a logical extension to Axis’s philosophy which supports the organization’s research on quality companies that can deliver sustainable growth. The idea here is to integrate ESG assessment in the overall Axis investment process and to launch a dedicated thematic ESG Fund that focuses on ESG issues while constructing the portfolio.

The bottom-line

Axis ESG Equity Fund provides investors with an opportunity to not only seeks some financial benefits but also get the ball rolling by investing in a socially-responsible fund. This step taken by Axis, to enhance the quality of our living environment, is a belief that encapsulates the core of sustainable investing. You can invest in Axis ESG Equity Fund with a minimum amount of Rs. 5000 and in the multiple of Re. 1/- thereafter. The NFO period will start from 22nd January 2020 and last till 5th February 2020.

Investors should also be aware that since this is an equity-linked scheme, it carries a high-risk profile. Hence, investors should consult their financial advisers if in doubt about whether the product is suitable for them. Additionally, you can use the MF investment app to access detailed information and track your investments more effectively.

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