Axis ESG Equity Fund - What is ESG Mutual Fund, Features, Benefits and Performance
What is ESG?
ESG measures the sustainability of the company.
Here’s how companies make money rather than just how much they make
The 3 pillars of ESG
Each pillar captures a number of issues:
| Environmental | Climate Change Natural Resource Use Waste Management Environmental Opportunities | Carbon emissions, Product carbon footprint, Energy Efficiency Water stress, Biodiversity & Land use, Raw material sourcing, Financing Environmental Impact Toxic Emissions & Waste, Packaging material and waste, Electronic waste Opportunities in clean tech, green building, renewable energy |
| Social | Human capital Product Safety Social Opportunities | Labor management, Health & Safety, Supply chain, Controversial sourcing Chemical safety, Financial Product Safety, Privacy & Data security, Insuring health Nutrition & Health, Access to communication, health & finance |
| Governance | Corporate Governance Business Ethics Government & Public Policy | Practice & policies, disclosures Corruption & instability, Ethics and Fraud, Anti-competitive practices Financial System instability |
Why ESG? Businesses are getting increasingly impacted by non-financial factors
- Climate change
- Sustainable farming/mining
- Privacy and data security
- Greater regulatory scrutiny
- Lifestyle changes
All stakeholders (investors, customers, regulators) are getting more sensitive to these issues.
Weak ESG practices increase business risks
ESG factors and the impact on risk. ESG factors lead to a range of potential impacts on stakeholders.
| Environmental | Social | Governance |
| Firm generating high levels of | Firm that poorly treats its employees or | Firm with poor governance |
| pollution may suffer from a future tax | suppliers may be boycotted by the consumers | heavily fined by the regulator |
Low ESG score = Higher risk
• Events can have a meaningful impact on the value of the firm
• Impact is uncertain
• Timeframe is long and uncertain
ESG is affecting Indian companies
Recent environmental issues/events
| EXTREME WEATHER EVENTS | CLIMATE CHANGE | POLLUTION |
| High insurance claims | Government push on Renewables | Ban on diesel vehicles in Delhi |
| Bad debt risks for banks and NBFCs | Ban/ restriction on construction activities by NGT | |
| Switch to efficient fuels |
Recent social issues/events
| HEALTH AND LIFESTYLE CHANGES | SOCIAL UNREST | GOVERNMENT PUSH ON SOCIAL SCHEMES |
| Consumer preference switching to Ayurvedic/ Herbal products | Farmers/ Locals protest against land acquisitions | Affordable housing |
| Labor strikes against perceived unfair treatment | Financial inclusion - Jan Dhan Yojana | |
| Health insurance - Ayushman Bharat Yojana |
| TRANSPARENCY | WHISTLEBLOWERS | REGULATORY SCRUTINY |
| Companies hit by whistleblower complaint alleging misconduct |
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Recent governance issues/ events
ESG & COVID – 19
This crisis has actually increased the visibility and perceived importance of sustainable business practices.
We have witnessed several companies going out of their way to help the society at large. A few include:
• HUL & Nestle which provide essential goods have taken efforts to keep their operations going while taking utmost precautions on employee safety. Nestle has provided its sales force with a Covid-19 insurance cover.
• They are also working to help grocery stores by providing them masks, gloves, and sanitizers. HUL has supported hospitals by providing them with its health and hygiene products and to create isolation facilities.
• Automobile manufacturers like M&M & Maruti Suzuki have taken steps to assist in the production of ventilators and other protective equipment.
• Hotel chains like India hotels & Mahindra Holidays are offering free stays for medical personal and even converting facilities into makeshift quarantine centers.
Does ESG add value for investors?
| Sustainable companies | Run for the long term Taking into account impact on all stakeholders | Maintain structural growth Deliver compounding returns to shareholders • Have a lower cost of capital • Command premium valuation • Have a lower volatility and reduced drawdown risk |
Does ESG add value?
| Global experience | ||
| Risk | Reputation | Returns |
| 90%* | 88%* | 80%* |
| Cost of Capital: Sound sustainability standards lower the cost of capital of companies | Operational Performance: Solid ESG practices result in improved operational performance | Share price performance: Good sustainability practices have a positive influence on the performance of shares |
*Percentage of studies showing.
Data Source: Oxford report ‘From stockholder to stakeholder’ based on more than 200 academic studies (Mar 2015), Bloomberg, NSE, Axis AMC analysis.
Past performance may or may not be sustained in future. Returns provided are CAGR for the period 31st Dec 2011 to 31st Dec 2020.
Axis ESG Equity Fund
(An open-ended equity scheme investing in companies demonstrating sustainable practices across Environment, Social and Governance (ESG) theme)
ESG approach at Axis | ||
| A proprietary, forward-looking and dynamic view of ESG based on qualitative assessment of each company | Process created with inputs from Schroders – incorporating global best practices | All companies evaluated using a standardized framework that uses data as well as analyst assessments |
What are we looking for?
| We look for truly sustainable businesses |
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| We believe investing in these companies |
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| Finding these companies is challenging |
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Please refer SID for detailed investment strategy
ESG process | |||
| Detailed ESG assessment on stock inclusion in the universe | Annual stock-level ESG review to capture changes to operating environment | Review of specific ESG issue faced by any company in the universe | Active engagement with management – improved disclosures, proxy voting |
| Process designed based on Schroders inputs |
Fund will follow a multi-stage process | ||
| 1. Sector level screening: The scheme will exclude sectors/ themes that are deemed harmful from a societal perspective. Eg: Exclude Tobacco, Liquor, Gambling stocks | 2. Stock level screening: No investments in stocks which throw up ESG red flags as a part of our review | 3. Portfolio Construction: Allocation based on a detailed qualitative ESG review of each company complementing the existing fundamentals based investment process |
Fund will invest up to 30% in global sustainable companies
Investment: Invest directly in overseas securities – focus on developed markets with high level of ESG maturity
Execution: Transaction executed through key intermediaries (broking/custody) in US and other major markets
Global Advice: Overseas investments will be advised by Schroders
Philosophy: Aligned with the fund philosophy of looking for strong ESG businesses
Please refer to the Scheme Information document of the document for detailed asset allocation and investment strategy. Axis AMC has an arrangement with Schroders Investment Management Limited to seek investment advice for investment in foreign securities. Foreign security may be US$ denominated or in any other foreign currency
Portfolio Allocation
Portfolio Exposure
| Domestic Equity | 70.95% |
| International Equity | 26.69% |
| Cash & Equivalents | 2.36% |
Asset Allocation By Region
| India | 71.4% |
| USA & Canada | 13% |
| Europe | 7.6% |
| Asia | 4.1% |
Portfolio breakup (30th July 2021)
| Top 10 domestic equity | % of AUM |
| Avenue Supermarts Limited | 10.1% |
| Bajaj Finance Limited | 9.9% |
| Nestle India Limited | 8.2% |
| Wipro Limited | 7.1% |
| Tata Consultancy Services Limited | 7.1% |
| HDFC Bank Limited | 6.6% |
| Info Edge (India) Limited | 6.3% |
| Housing Development Finance Corporation Limited | 5.9% |
| Kotak Mahindra Bank Limited | 4.6% |
| Torrent Power Limited | 3.4% |
| Top 10 international equity | % of AUM |
| Microsoft Corp | 1.7% |
| Alphabet Inc A | 1.5% |
| Recruit Holdings Co. Ltd | 1.0% |
| Booking Holdings Inc | 0.9% |
| Schneider Electric SE | 0.9% |
| Bunzl PLC | 0.9% |
| Taiwan Semiconductor Manufacturing Co Ltd | 0.9% |
| Roche Holding Ltd | 0.9% |
| Texas Instruments Inc | 0.9% |
| Vertiv Holdings Co | 0.9% |
Fund Facts
| Parameter | Description |
| Name of the fund | Axis ESG Equity Fund |
| Type of scheme | An Open-ended equity scheme investing in companies demonstrating sustainable practices across Environment, Social and Governance (ESG) theme |
| Category | Equity – Thematic Fund |
| Benchmark | Nifty 100 ESG TRI Index |
| Fund Manager* | Jinesh Gopani |
| Minimum Application Amount | Rs. 5,000 and in multiples of Rs. 1/- thereafter |
Why should you invest?
Sustainable stocks deliver sustainable growth
• To aim for long term capital appreciation by investing in quality companies with sustainable growth prospects
• Sustainable companies are expected to have lower risk and deliver sustainable growth
• Axis is well positioned to incorporate ESG while investing basis our core focus towards quality and sustainable growth
Performance (30th July 2021)
| CAGR (%) | Current Value of investment of Rs. 10,000 | CAGR (%) | Current Value of investment of Rs. 10,000 | CAGR (%) | Current Value of investment of Rs. 10,000 | CAGR (%) | Current Value of investment of Rs. 10,000 | |
| Axis ESG Equity Fund - Regular Plan - Growth | 41.56% | 14,142 | NA | NA | NA | NA | 31.45% | 14,920 |
| Nifty 100 ESG TRI (Benchmark) | 50.36% | 15,019 | NA | NA | NA | NA | 27.72% | 14,305 |
| Nifty 50 TRI (Additional Benchmark) | 44.30% | 14,416 | NA | NA | NA | NA | 20.71% | 13,170 |
Past performance may or may not be sustained in future. Since inception returns is calculated on Rs.10 invested at inception. Different plans have different expense structure. Plan of the scheme for which performance is given is indicated above. Jinesh Gopani is managing the scheme since 12th February 2020 and he manages 9 schemes of Axis Mutual Fund & Hitesh Das is managing the scheme since 12th February 2020 and he manages 15 schemes of Axis Mutual Fund .Returns greater than 1 year period are compounded annualised CAGR). Face Value per unit : ?10. Please refer to the Annexure for returns of all the schemes managed by him
SIP Performance (30th July, 2021)
| Axis ESG Equity Fund – Growth | ||||
| SIP Investments | Since Inception SIP | 5 Year SIP | 3 Year SIP | 1 Year SIP |
| Total Amount Invested | 180000 | NA | NA | 120000 |
| Market value as on July 30, 2021 | 235686 | NA | NA | 142718 |
| Returns (Annualised) | 39.27% | NA | NA | 37.24% |
| Benchmark Returns (Annualised) | 49.27% | NA | NA | 46.64% |
| Additional Benchmark Returns (Annualised) | 41.67% | NA | NA | 38.15% |
Annexure
SEBI Prescribed Performance Annexures
Return of scheme managed by Jinesh Gopani (TOTAL SCHEMES MANAGED: 9 SCHEMES) (As on 30th July 2021)
| Fund Name | Date of inception | CAGR (%) | Current Value of Investment of Rs. 10,000/- | CAGR (%) | Current Value of Investment of Rs. 10,000/- | CAGR (%) | Current Value of Investment of Rs. 10,000/- | CAGR (%) | Current Value of Investment of Rs. 10,000/- |
| Axis Long Term Equity Fund - Regular Plan - Growth | 29-Dec-09 | 51.49% | 15,131 | 14.40% | 14,973 | 15.24% | 20,341 | 17.95% | 67,776 |
| S&P BSE 200 TRI (Benchmark) | 49.77% | 14,960 | 13.60% | 14,661 | 14.66% | 19,836 | 11.98% | 37,121 | |
| Nifty 50 TRI (Additional Benchmark) | 44.30% | 14,416 | 12.90% | 14,391 | 14.18% | 19,419 | 11.42% | 35,018 | |
| Axis Long Term Equity Fund - Direct Plan - Growth | 1-Jan-13 | 52.81% | 15,263 | 15.42% | 15,377 | 16.36% | 21,346 | 20.56% | 49,763 |
| S&P BSE 200 TRI (Benchmark) | 49.77% | 14,960 | 13.60% | 14,661 | 14.66% | 19,836 | 14.34% | 31,587 | |
| Nifty 50 TRI (Additional Benchmark) | 44.30% | 14,416 | 12.90% | 14,391 | 14.18% | 19,419 | 13.43% | 29,480 | |
| Axis Focused Fund - Regular Plan - Growth | 29-Jun-12 | 48.26% | 14,810 | 12.88% | 14,384 | 16.69% | 21,658 | 17.12% | 42,060 |
| Nifty 50 TRI (Benchmark) | 44.30% | 14,416 | 12.90% | 14,391 | 14.18% | 19,419 | 14.19% | 33,399 | |
| S&P BSE SENSEX TRI (Additional Benchmark) | 41.55% | 14,141 | 13.14% | 14,484 | 14.73% | 19,896 | 14.45% | 34,114 | |
| Axis Focused Fund - Direct Plan - Growth | 1-Jan-13 | 50.05% | 14,989 | 14.28% | 14,926 | 18.11% | 23,008 | 17.54% | 40,017 |
| Nifty 50 TRI (Benchmark) | 44.30% | 14,416 | 12.90% | 14,391 | 14.18% | 19,419 | 13.43% | 29,480 | |
| S&P BSE SENSEX TRI (Additional Benchmark) | 41.55% | 14,141 | 13.14% | 14,484 | 14.73% | 19,896 | 13.73% | 30,159 |
^An open ended equity linked savings scheme with a statutory lock in of 3 years and tax bene?t. Data As on 30th July 2021. Past performance may or may not be sustained in future. Calculations are based on Regular Plan - Growth Option NAV and Direct Plan – Growth Option NAV, as applicable. Since inception returns are calculated on Rs.10/- invested at inception. Di?erent plans have di?erent expense structure. Plan of the scheme for which performance is given is indicated above.
Jinesh Gopani is managing Axis Long Term Equity Fund since 1st April 2011, Axis Focused Fund since 7th June 2016 and Axis Technology ETF and Axis Healthcare ETF since inception, Axis Growth Opportunities Fund since inception, Axis Retirement Fund which includes Aggressive Plan & Conservative Plan, Dynamic Plan since inception, Axis ESG Equity Fund since inception.
Annexure
SEBI Prescribed Performance Annexures
Return of scheme managed by Jinesh Gopani (TOTAL SCHEMES MANAGED: 9 SCHEMES) (As on 30th July 2021)
| Fund Name | Date of inception | 1 Year CAGR (%) | Current Value of Investment of Rs. 10,000/- | 3 Year CAGR (%) | Current Value of Investment of Rs. 10,000/- | 5 Year CAGR (%) | Current Value of Investment of Rs. 10,000/- | Since Inception CAGR (%) | Current Value of Investment of Rs. 10,000/- |
| Axis Growth Opportunities Fund - Regular Plan - Growth | 22-Oct-18 | 65.09% | 16,486 | NA | NA | NA | NA | 26.50% | 19,190 |
| NIFTY Large Midcap 250 TRI (Benchmark) | 61.99% | 16,178 | NA | NA | NA | NA | 21.67% | 17,226 | |
| Nifty 50 TRI (Additional Benchmark) | 44.30% | 14,416 | NA | NA | NA | NA | 18.26% | 15,921 | |
| Axis Growth Opportunities Fund - Direct Plan - Growth | 22-Oct-18 | 67.71% | 16,747 | NA | NA | NA | NA | 28.70% | 20,130 |
| NIFTY Large Midcap 250 TRI (Benchmark) | 61.99% | 16,178 | NA | NA | NA | NA | 21.67% | 17,226 | |
| Nifty 50 TRI (Additional Benchmark) | 44.30% | 14,416 | NA | NA | NA | NA | 18.26% | 15,921 | |
| Axis Retirement Fund - Aggressive Plan - Regular Plan - Growth | 20-Dec-19 | 34.56% | 13,445 | NA | NA | NA | NA | 16.79% | 12,840 |
| NIFTY 50 Hybrid Composite Debt 70:30 Index (Benchmark) | 31.52% | 13,142 | NA | NA | NA | NA | 16.64% | 12,814 | |
| Nifty 50 TRI (Additional Benchmark) | 44.30% | 14,416 | NA | NA | NA | NA | 18.23% | 13,096 | |
| Axis Retirement Fund - Aggressive Plan - Direct Plan - Growth | 20-Dec-19 | 36.91% | 13,679 | NA | NA | NA | NA | 18.81% | 13,200 |
| NIFTY 50 Hybrid Composite Debt 70:30 Index (Benchmark) | 31.52% | 13,142 | NA | NA | NA | NA | 16.64% | 12,814 | |
| Nifty 50 TRI (Additional Benchmark) | 44.30% | 14,416 | NA | NA | NA | NA | 18.23% | 13,096 |
Fund since inception, Axis Retirement Fund which includes Aggressive Plan & Conservative Plan, Dynamic Plan since inception, Axis ESG Equity Fund since inception. Data As on 30th July 2021. Past performance may or may not be sustained in future. Calculations are based on Regular Plan - Growth Option NAV and Direct Plan – Growth Option NAV, as applicable. Since inception returns are calculated on Rs.10/- invested at inception. Di?erent plans have di?erent expense structure. Plan of the scheme for which performance is given is indicated above.
Jinesh Gopani is managing Axis Long Term Equity Fund since 1st April 2011, Axis Focused Fund since 7th June 2016 and Axis Technology ETF and Axis Healthcare ETF since inception, Axis Growth Opportunities
Annexure
SEBI Prescribed Performance Annexures
Return of scheme managed by Jinesh Gopani (TOTAL SCHEMES MANAGED: 9 SCHEMES) (As on 30th July 2021)
| Fund Name | Date of inception | 1 Year CAGR (%) | Current Value of Investment of Rs. 10,000/- | 3 Year CAGR (%) | Current Value of Investment of Rs. 10,000/- | 5 Year CAGR (%) | Current Value of Investment of Rs. 10,000/- | Since Inception CAGR (%) | Current Value of Investment of Rs. 10,000/- |
| Axis Retirement Fund - Conservative Plan - Regular Plan - Growth | 20-Dec-19 | 17.53% | 11,748 | NA | NA | NA | NA | 12.83% | 12,146 |
| NIFTY 50 Hybrid Short Duration Debt 25:75 Index (Benchmark) | 14.58% | 11,454 | NA | NA | NA | NA | 11.45% | 11,908 | |
| NIFTY 10 yr Benchmark G-Sec (Additional Benchmark) | 1.99% | 10,198 | NA | NA | NA | NA | 5.99% | 10,983 | |
| Axis Retirement Fund - Conservative Plan - Direct Plan - Growth | 20-Dec-19 | 19.62% | 11,956 | NA | NA | NA | NA | 14.85% | 12,499 |
| NIFTY 50 Hybrid Short Duration Debt 25:75 Index (Benchmark) | 14.58% | 11,454 | NA | NA | NA | NA | 11.45% | 11,908 | |
| NIFTY 10 yr Benchmark G-Sec (Additional Benchmark) | 1.99% | 10,198 | NA | NA | NA | NA | 5.99% | 10,983 | |
| Axis Retirement Fund - Dynamic Plan - Regular Plan - Growth | 20-Dec-19 | 32.65% | 13,255 | NA | NA | NA | NA | 17.41% | 12,950 |
| NIFTY 50 Hybrid Composite Debt 65:35 Index (Benchmark) | 29.47% | 12,938 | NA | NA | NA | NA | 16.26% | 12,74 | |
| Nifty 50 TRI (Additional Benchmark) | 44.30% | 14,416 | NA | NA | NA | NA | 18.23% | 13,096 | |
| Axis Retirement Fund - Dynamic Plan - Direct Plan - Growth | 20-Dec-19 | 35.03% | 13,492 | NA | NA | NA | NA | 19.53% | 13,330 |
| NIFTY 50 Hybrid Composite Debt 65:35 Index (Benchmark) | 29.47% | 12,938 | NA | NA | NA | NA | 16.26% | 12,747 | |
| Nifty 50 TRI (Additional Benchmark) | 44.30% | 14,416 | NA | NA | NA | NA | 18.23% | 13,096 |
Data As on 30th July 2021. Past performance may or may not be sustained in future. Calculations are based on Regular Plan - Growth Option NAV and Direct Plan – Growth Option NAV, as applicable. Since inception returns are calculated on Rs.10/- invested at inception. Di?erent plans have di?erent expense structure. Plan of the scheme for which performance is given is indicated above.
Jinesh Gopani is managing Axis Long Term Equity Fund since 1st April 2011, Axis Focused Fund since 7th June 2016 and Axis Technology ETF and Axis Healthcare ETF since inception, Axis Growth Opportunities Fund since inception, Axis Retirement Fund which includes Aggressive Plan & Conservative Plan, Dynamic Plan since inception, Axis ESG Equity Fund since inception.
Annexure
SEBI Prescribed Performance Annexures
Return of scheme managed by Jinesh Gopani (TOTAL SCHEMES MANAGED: 9 SCHEMES) (As on 30th July 2021)
| Fund Name | Date of inception | 1 Year CAGR (%) | 3 years Current Value of Investment of Rs. 10,000/- | 3 Year CAGR (%) | 5 years Current Value of Investment of Rs. 10,000/- | 5 Year CAGR (%) | Since Inception Current Value of Investment of Rs. 10,000/- | Since Inception CAGR (%) | Current Value of Investment of Rs. 10,000/- |
| Axis ESG Equity Fund - Regular Plan - Growth | 12-Feb-20 | 41.56% | 14,142 | NA | NA | NA | NA | 31.45% | 14,920 |
| Nifty 100 ESG TRI (Benchmark) | 50.36% | 15,019 | NA | NA | NA | NA | 27.72% | 14,305 | |
| Nifty 50 TRI (Additional Benchmark) | 44.30% | 14,416 | NA | NA | NA | NA | 20.71% | 13,170 | |
| Axis ESG Equity Fund - Direct Plan - Growth | 12-Feb-20 | 43.89% | 14,374 | NA | NA | NA | NA | 33.61% | 15,280 |
| Nifty 100 ESG TRI (Benchmark) | 50.36% | 15,019 | NA | NA | NA | NA | 27.72% | 14,305 | |
| Nifty 50 TRI (Additional Benchmark) | 2020. All rights reserved Axis Mutual Fund. |