These Two Newly Launched ESG Funds Has Given Over 23% Annual Average Returns

What are ESG Funds?

ESG funds are equity and/or bond portfolios in which environmental, social, and governance considerations have been factored into the investment process. This signifies that the fund's shares and bonds have passed extensive testing to determine how sustainable the firm or government is in terms of ESG standards. ESG investing is looking for assets that are both sustainable and socially responsible.

ICICI Prudential ESG Fund - Direct Plan-Growth

This is a Thematic-ESG mutual fund as mentioned above. This fund was launched on 09 October 2020 by the ICICI Prudential Mutual Fund. The Asset Under Management (AUM) or fund size of this fund is worth Rs 1520.54 Crore.

The Recent declared NAV or Net Asset Value dated 06 April 2022 is Rs 13.74. The expense ratio of this fund is 0.8%, compared to its category average, which is less, which is good. It is an open-ended medium-sized fund of its category that seeks long term capital appreciation. 

This fund is not yet rated, however, it is a highly risky fund for investment. Investors are advised to do research before investing in this fund for capital gain. For investment in this fund, the minimum investment required is Rs 5,000, and for Sip, it is Rs 100. 

The fund's Direct-Growth scheme has delivered 16.24% annualised returns in the last 1-year, whereas, since its inception, it has given 23.76% average annual returns.

The fund has the majority of its money invested in the Technology, Financial, Consumer Staples, Automobile, and Healthcare sectors. It has taken less exposure in Technology, Financial sectors compared to other funds in the category. 
The fund's top 5 holdings are Infosys Ltd., HDFC Bank Ltd., Wipro Ltd., HCL Technologies Ltd., and Housing Development Finance Corpn. Ltd.

Axis ESG Equity Fund - Direct Plan-Growth

This is also a Thematic-ESG Mutual fund from the Axis Mutual Fund, launched on 22 January 2022. The Direct Plan-Growth scheme of this fund has worth Rs 1864.53% Asset Under Management or AUM.

The NAV of this scheme declared on 06 April 2022 is Rs 16.26. The scheme's expense ratio is 0.54%, compared to its category average, it is also less than its peer fund mentioned above. It open-ended medium-sized fund of its category that also follows the long term capital appreciation strategy. 

It is a highly risky fund for investment, and it doesn't guarantee returns. However, it has given good returns since its inception. For investment in this scheme, the minimum investment amount required is Rs 5,000 and for SIP, it is Rs 1,000. 

Having said that, this fund has given good returns since its inception. The has given annualised returns of 16.64% in 1 year, and 37.09% in 2-years. Since its inception, it has delivered, 25.40% average annual returns, which is good compared to its category average annual returns of 16.81%. 

The majority of the fund's assets are invested in the financial, services, technology, consumer staples, and healthcare sectors. In comparison to other funds in the category, it has acquired less exposure in the Financial and Services sectors.

Bajaj Finance Ltd., Avenue Supermarts Ltd., Nestle India Ltd., Tata Consultancy Services Ltd., and Wipro Ltd. are the fund's top holdings.