Mutual Fund News : Invesco Mutual Fund Introduces Invesco India ESG Equity Fund

Publish Date:

Invesco Mutual Fund has launched an open ended equity scheme – Invesco India ESG Equity Fund.

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

The investment objective of the scheme is to generate capital appreciation from a diversified portfolio of Equity and Equity Related Instruments of companies which are selected based on Environmental, Social and Governance (ESG) criteria as defined by our proprietary investment framework. However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved. The Scheme does not assure or guarantee any returns.

Under normal circumstances, 80% to 100% of the funds portfolio will be invested in Equity and equity related instruments of companies complying with ESG criteria. It can invest up to 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/Units of overnight and liquid schemes of Invesco Mutual Fund, and has flexibility to invest up to 10% of its assets in Units issued by REITs and InvITs.

As per the Scheme Information Document, Invesco India ESG Equity Fund will primarily invest in equity securities of companies which are selected based on Environmental, Social and Governance (ESG) criteria as defined by the proprietary investment framework followed by the fund house.

The ESG philosophy at the fund house is integrated with its equity investment philosophy and provides an additional framework of risk analysis. Evaluation of ESG factors is an important input to the investment process integrated with its core inputs on financial research – both primary and secondary.

The fund house measures the ESG risk for the companies on a scale of 1-3, whereby 3 denotes High Risk or Negative, 2 denotes Moderate Risk or Neutral and 1 denotes Low Risk or Positive. This is thus a reverse scaling system.

It has assigned a higher and at par weightage of 40% to Governance aspect for all companies/ industries. The balance 60% is distributed between Environmental and Social aspect based on the relative influence of these aspects on the industry in which the company operates.

At a stock screening level, while categorizing any new company as per Invesco Asset Management’s existing proprietary stock categorization framework, the analyst evaluates the ESG risk score of the company being considered for categorization. Companies above a defined threshold ESG risk score of 2.5 would not be considered for categorization thereby making ESG integral to the investment process.

After detailed screening and qualifying on its ESG framework, at a portfolio construct level, the fund management will include only those companies in the portfolio which will meet the defined thresholds individually.

For instance, the maximum ESG risk score on any of these three parameters individually, should not exceed 2.0 while maximum permissible company level ESG risk score should be 1.8. Thus, being an ESG centric fund, at an aggregate level, it intends to have the maximum permissible portfolio weighted average ESG risk score of less than or equal to 1.50

Invesco India ESG Equity Fund will primarily invest in largecap stocks and will limit exposure to midcap & smallcap stocks upto 35% allocation of overall portfolio.

The Scheme will follow blend of growth and value style and will have approximately 30 - 40 holdings.

Invesco India ESG Equity Fund’s performance will be benchmarked against NIFTY100 Enhanced ESG TRI (Total Return Index).

The fund will be managed by Mr Taher Badshah and Mr Amit Nigam.

The NFO opens for subscription on February 26, 2021 and closes on March 12, 2021. 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 1,000 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).