Thursday, December 3, 2020

Aditya Birla Sun Life Mutual Fund Launches Aditya Birla Sun Life ESG Fund in Indian MF Market

 NFO opens on December 04, 2020 and closes on December 18, 2020

1.      Fund house has partnered with leading global ESG research provider Sustainalytics for ESG scores and ratings

2.      Each company will be scored on 3 pillars of ESG. Non-conforming sectors like Cluster Munitions, Anti-Personnel Mines, Chemical and Biological Weapons, Coal & Tobacco etc. to be excluded

3.      Can invest in international securities adhering to ESG practices up to 35% of the fund’s net assets

Aditya Birla Sun Life AMC Limited, a subsidiary of Aditya Birla Capital Limited (a significant non-bank financial services’ conglomerate), and investment manager to Aditya Birla Sun Life Mutual Fund (ABSLMF) announced today the launch of Aditya Birla Sun Life ESG Fund, an open-ended equity scheme investing in companies following Environment, Social & Governance (ESG) theme. The Fund endeavours to participate in ESG aligned existing and emerging opportunities, eliminate risky companies and invest in high quality & sustainable growth compounders to generate better risk adjusted returns.

Aditya Birla Sun Life Mutual Fund has partnered with leading global ESG research provider ‘Sustainalytics’ for ESG scores and ratings which will be the filter for defining the investment universe. Each company will be scored on 3 pillars of ESG and non-conforming sectors will be excluded. This will further be screened basis fundamental analysis and financial parameters with a combination of top-down and bottom-up approach. The fund will be market cap agnostic.

Commenting on the new fund, A. Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC Limited said: “Environment, Social and Governance factors, or ESG have become increasingly important parameters of investment decisions worldwide, beyond the traditional financial factors. This has gained further importance after Covid-19, an insight that also our survey across 1600 plus respondents shows. The majority of respondents felt their attitude towards ESG in investment decision making had changed after the pandemic. This is an important shift in mindset. ESG concept is at a very nascent stage in India and is widely unexplored, though it’s an established theme globally. With the Indian Government too emphasising its ESG focus recently and global flows into ESG focused sectors and companies seeing consistent increase, there is potential for this theme to play out secularly”.

Historically ESG compliant companies have been found to be less risky, have better operational performance and generated better returns too. The portfolio looks to benefit from rising flows into ESG compliant companies which increases the possibility of re-rating and augurs well for longer term market performance. From large institutional to individual investors, there is a growing consideration of non-financial risks in investment decisions. ESG lens enables to look beyond the traditional investment parameters to identify high quality socially responsible companies for investing. 

The minimum application amount for this fund is Rs.500/- and in multiples of Re. 1/- thereafter, during the New Fund Offer period. Investors can come into this fund both in the SIP or Lumpsum route.

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