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ICICI Prudential Mutual Fund is launching a new fund offer for an ESG fund. ICICI Prudential ESG Fund will open for subscriptions on September 21 and will close on October 5.

What are ESG Funds?

ESG expands to environmental, social and governance-focussed funds. ESG funds invest in stocks of companies that have no evidence of any adverse environmental impact or social risks. Most ESG fund managers rule out stocks of companies that manufacture tobacco, gambling or alcohol-related products. According to the classifications laid out by the Securities and Exchange Board of India (Sebi), ESG funds fall under the thematic fund category.

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Investment Strategy

The mutual fund scheme will be an open-ended equity fund that will be a diversified set of stocks which clarify the environmental, social and governance (ESG) criteria. 

Here is what the indicative asset allocation looks like for the fund

InstrumentsIndicative Allocation (% of net assets)Risk Profile
MinimumMaximumHigh/Medium/Low
Equity & Equity related instruments of companies identified based on the Environmental, Social and Governance (ESG) criteria80100High
Other equity020High
Debt and Money market instruments, Units of Debt oriented mutual fund schemes and term deposits (margin money)020Low to Medium
Units issued by REITs and InvITs010Medium to High
Preference Shares020Medium to High

Benchmark

Nifty 100 ESG TRI is the benchmark index for this mutual fund scheme. The index will reflect the performance of the companies that fall within the Nifty 100 index but based on their ESG scores. The weight of each constituent in the Nifty 100 ESG index is calculated based on the ESG score of the company. 

To be eligible for the ESG index, stocks should fulfil the following criteria:

  • Stocks should be a part of Nifty 100
  • Companies should have an ESG score
  • Companies with a controversy category 4 and 5 will be excluded. The scale goes from 1 to 5 with 1 being the least controversial. 
  • Companies manufacturing alcohol, tobacco, controversial weapons or the ones which engage in gambling operations are excluded.

Fund Details

ICICI ESG Fund will offer both the plans: regular and direct plan. Under both plans, the fund will provide growth and dividend options. The default option will be the growth option.

Under the dividend option, the investor can choose from the three:

  • Dividend Payout
  • Dividend Reinvestment 
  • Sweep

Here are all the details of the ESG Fund:

Name of the FundICICI Prudential ESG Fund 
Type of SchemeAn open-ended equity scheme which invests in stocks of companies based on the Environmental, Social and Governance (ESG) theme
BenchmarkNifty 100 ESG TRI
NFO DatesOpens on September 21, 2020, and closes on October 5, 2020
Fund ManagerMrinal Singh, Priyanka Khandelwal
Minimum Application Amount/Minimum Purchase Amount (including switches)Rs. 5,000 and in multiples of Re. 1 after that
Minimum Additional Investment (including switches)Rs 1,000 and in multiples of Re 1 after that
Minimum Redemption AmountAny amount
Entry LoadNil
Exit Load1%: If more units are redeemed/switched on or before 12 months from the date of allotment of Unit

NIL: If Units are redeemed/switched after 12 months from the date of allotment of units: Nil 

PlansRegular Plan and Direct Plan
OptionsGrowth and Dividend Option (Payout, Dividend Reinvestment Option, Sweep)

SIP/STP/SWP

SIP

TypeDateMinimum AmountMinimum Installments
DailyOnly business daysRs. 100 and in multiples of Re. 1 6
WeeklyAny day (Monday to Friday)
Fortnightly1st and 16th day of each month, as applicable*
MonthlyAny date
QuarterlyAny dateRs. 5,000 and in multiples of Re. 1 after that per instalment4

 

STP

TypeMinimum AmountMinimum instalmentsFrequency
DailyRs. 250 and in multiples of Re 16Daily
WeeklyRs. 1,000 and in multiples of Re 16Any day (Monday to Friday)
Monthly 6Any date
Quarterly4Any date

SWP

There are two options available under the SWP plan.

Option 1:

Under option one, quarterly, monthly, annual and half-yearly frequencies are available. The minimum number of instalments for all the frequencies will be 2. 

Any amount can be chosen for withdrawal under all the frequencies at the time of registration.  The investor can pick any date as the SWP withdrawal date and under any frequency available. 

Option 2:

Under option 1, investors can schedule their SWPs on a monthly note. Withdrawals can be scheduled for the 25th of every month. The instalment amount will be fixed at 0.75 % of the amount specified by the investor. It will be rounded off to the nearest highest multiple of Re.1.

Fund Managers

Mrinal Singh

Mr Singh has 17 years of experience. He has been working with ICICI Prudential AMC since 2008. Prior to that he has worked with Wipro and BOSCH. 

Other schemes managed by him are:

Priyanka Khandelwal:

Ms Khandelwal joined ICICI Prudential AMC in 2014 and worked as a deputy manager-finance until 2016.

Other funds managed by her are:

  • ICICI Prudential Global Stable Equity Fund (FOF)
  • ICICI Prudential US Bluechip Equity Fund
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