Mirae Asset Mutual Fund has launched India’s first ESG Exchange Traded Fund (ETF). They are ‘Mirae Asset ESG Sector Leaders ETF’ and ‘Mirae Asset ESG Sector Leaders Fund of Fund’. The New Fund Offer (NFO) for both the funds opened on October 27, 2020 and will close on November 10, 2020. Both the funds will be managed by Bharti Sawant and will be benchmarked against the Nifty 100 Environmental, Social, and Corporate Governance (ESG) Sector Leaders Index Total Return Index (TRI).
The ‘Mirae Asset ESG Sector Leaders ETF’ is an open-ended scheme following NIFTY 100 ESG Sector Leaders Total Return Index and India’s first ESG Fund of Fund, whereas, ‘Mirae Asset ESG Sector Leaders Fund of Fund’ is an open-ended fund of fund scheme mainly investing in Mirae Asset ESG Sector Leaders ETF. The latter scheme will offer investors the options for a Regular Plan and Direct Plan with Growth Option and Dividend Option (Pay-out & Re-investment).
Both funds will look forward by tracing the performance of the NIFTY 100 ESG Sector Leaders Index. This new index by NSE consists of a true to the label ESG focused portfolio with principal research by Sustainalytics, one of the leading ESG research providers globally.
The index consists of companies that have scored well on the management of ESG factors. But index excludes companies with significant ongoing controversy and hence reduces price risk associated with it. NIFTY 100 ESG Sector Leader Index has surpassed NIFTY 100 and NIFTY 50 Indices historically with lower price volatility (i.e. better return to risk profile). NIFTY 100 ESG Sector Leaders Index has surpassed more than 90% of large-cap funds (Regular plan) for an investment horizon of 3 years. The newly launched schemes will provide a relatively low-cost option which in turn gives the chance to grow the wealth by investing in companies with a responsible and sustainable business model.
Both new schemes of Mirae Asset offer Indian investors to invest in companies that are in line with their own core values. These underlying companies point to delight all stakeholders by being sustainable from an environmental and social perspective along with having the topmost governance practices.
Globally, challenges like climate change, issues pertaining to misconduct, labor rights, and data privacy have led investors to find out companies that operate in a sustainable, socially responsible, and ethical manner. ESG investing has gained popularity in global markets in the last few years because of its value-led investment philosophy, which has delivered good returns with a positive impact on society.