NFO Update: Mirae Asset ESG Sector Leaders ETF & Fund of Fund

Mirae Asset Investment Managers India, which has a quarterly average asset under management (AUM) of Rs 50,313 crore at the end of September 2020, announced the launch of India’s first ESG ETF, ‘Mirae Asset ESG Sector Leaders ETF’. This is an open-ended scheme that will be tracking Nifty 100 ESG Sector Leaders Total Return Index. Along with this, the fund house has also launched India’s first ESG Fund of Fund i.e. ‘Mirae Asset ESG Sector Leaders Fund of Fund’. This will be an open-ended fund of fund scheme that will be primarily investing in Mirae Asset ESG Sector Leaders ETF.

The new fund offer (NFO) has already opened for subscription and will close on November 10, 2020. Looking at Nifty 100 ESG Sector Leaders, the style of investing for the funds will be mostly large-cap.

Investors can invest under the scheme during the NFO period and also, during the ongoing offer period with a minimum investment of Rs 5,000 and in multiples of Re 1, thereafter.  

Objective: The investment objective of the scheme is to provide long-term capital appreciation from a portfolio investing predominantly in units of Mirae Asset ESG Sector Leaders ETF.

Strategy: Since this is a fund of fund, it will have a passive style of investing and would predominantly invest in units of Mirae Asset ESG Sector Leaders ETF, which in turn, will follow Nifty 100 ESG Sector Leaders Total Return Index.

Fund Manager: Both the funds will be managed by Bharti Sawant and would be benchmarked against Nifty 100 ESG Sector Leaders Index (TRI).

Our View: ESG is in trend now; not only in India but globally. A couple of funds, having an ESG theme, have been launched this year alone. In terms of size, they are still minuscule when compared to the total equity dedicated funds. Going by the performance of some of the funds dedicated to ESG, they have underperformed large-cap indices such as Nifty 50 in the last six months as well as in a one-year period.

This fund is for those of you, who are inclined to invest in funds or companies that strictly follow ethical investment and build portfolio accordingly; otherwise, you can invest in any large-cap fund that is a consistent performer.