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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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
|Instruments||Indicative Allocation (% of net assets)||Risk Profile|
|Equity & Equity related instruments of companies identified based on the Environmental, Social and Governance (ESG) criteria||80||100||High|
|Debt and Money market instruments, Units of Debt oriented mutual fund schemes and term deposits (margin money)||0||20||Low to Medium|
|Units issued by REITs and InvITs||0||10||Medium to High|
|Preference Shares||0||20||Medium to High|
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.
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
Here are all the details of the ESG Fund:
|Name of the Fund||ICICI Prudential ESG Fund|
|Type of Scheme||An open-ended equity scheme which invests in stocks of companies based on the Environmental, Social and Governance (ESG) theme|
|Benchmark||Nifty 100 ESG TRI|
|NFO Dates||Opens on September 21, 2020, and closes on October 5, 2020|
|Fund Manager||Mrinal 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 Amount||Any amount|
|Exit Load||1%: 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
|Plans||Regular Plan and Direct Plan|
|Options||Growth and Dividend Option (Payout, Dividend Reinvestment Option, Sweep)|
|Type||Date||Minimum Amount||Minimum Installments|
|Daily||Only business days||Rs. 100 and in multiples of Re. 1||6|
|Weekly||Any day (Monday to Friday)|
|Fortnightly||1st and 16th day of each month, as applicable*|
|Quarterly||Any date||Rs. 5,000 and in multiples of Re. 1 after that per instalment||4|
|Type||Minimum Amount||Minimum instalments||Frequency|
|Daily||Rs. 250 and in multiples of Re 1||6||Daily|
|Weekly||Rs. 1,000 and in multiples of Re 1||6||Any day (Monday to Friday)|
There are two options available under the SWP plan.
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.
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.
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:
- ICICI Prudential Focused Equity Fund
- ICICI Prudential Dividend Yield Equity Fund
- ICICI Prudential Growth Fund – Series 2
- ICICI Prudential Bharat Consumption Fund – Series 2
- ICICI Prudential Value Discovery Fund
- ICICI Prudential Retirement Fund – Hybrid Aggressive Plan, Hybrid Conservative Plan, Pure Equity Plan, Pure Debt
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