Mutual Fund News : Aditya Birla Sun Life Mutual Fund Introduces Aditya Birla Sun Life ESG Fund

Publish Date:

Aditya Birla Sun Life Mutual Fund has launched an open ended equity scheme – Aditya Birla Sun Life ESG Fund.

It is a thematic fund that will focus on investing in companies following Environmental, Social and Governance (ESG) theme.

The investment objective of the scheme is to generate long-term capital appreciation by investing in a diversified basket of companies following Environmental, Social and Governance (ESG) theme. The Scheme does not guarantee/indicate any returns. There can be no assurance that the schemes’ objectives will be achieved.

Under normal circumstances, 80% to 100% of the funds portfolio will be invested in Equity & Equity related instruments of companies following the Environment, Social & Governance (ESG) theme. It can also invest upto 35% in foreign securities i.e. global companies following the ESG theme, and upto 20% of its assets in Equity & Equity related securities of other companies.

The fund can also hold up to 20% of its assets in Debt & Money Market Instruments (including units of Debt & Liquid Mutual Fund schemes), and has flexibility to invest up to 10% of its assets in Units issued by REITs and InvITs.

Aditya Birla Sun Life ESG Fund will invest in a basket of securities based on combining existing traditional fundamental, bottom-up financial analysis along with an analysis on the environmental, social and governance aspects of the company.

Companies would first be scored on the 3 pillars of ESG basis their actions:

1. Environmental impact on the planet and resources

2. Social responsibility towards customers, employees, investors and the public at large

3. Robust, implemented Corporate Governance practices for transparency and stability of management

While ESG compliant stocks with high growth potential would be selected, the Non-conforming companies’ stocks will be excluded.

As a part of the framework to shortlist ESG compliant companies, the ESG process will be assessed and executed at various levels. There would Sector Level screening, stock level screening and further some steps to portfolio construction. ESG scores for each portfolio company shall be an integral part of the investment research process.

The shortlisted companies will be evaluated from a detailed qualitative perspective so as to complement the fundamental and quantitative research with ESG framework based research.

Aditya Birla Sun Life ESG Fund will maintain a market cap agnostic portfolio with 60-80% in Large Cap stocks and remaining in Mid & Small Cap stocks. It will seek to have a focused portfolio of 40-50 ESG compliant companies with high growth potential.

The fund’s performance will be benchmarked against Nifty 100 ESG TRI (Total Return Index).

The fund will be managed by Mr Satyabrata Mohanty, whereas Mr Vinod Bhat will be the designated fund manager for managing overseas investments of the scheme.

The NFO opens for subscription on December 04, 2020, and closes on December 18, 2020. The scheme will reopen for continuous Sale and Repurchase within 5 business days from the date of allotment.

The fund’s NAV is priced at Rs 10/- per unit during the NFO period. The minimum subscription amount is Rs 500 and in multiples of Rs 1 thereafter.

The fund offers Regular Plan and Direct Plan having Growth Option and Dividend Option (Dividend Re-investment and Dividend Pay-out facilities).