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This Latest Investment Opportunity Is Gaining Global Traction..

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By Author: QuantumAMC
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In a recent poll#, Investors from 50 global institutions were surveyed.
These institutions collectively represent a total of $12.9 trillion in assets under management (AUM).
They were asked a simple question -
'How they expected COVID-19 would impact the future of ESG investing'.
71% of respondents responded that it was "rather likely," "likely," or "very likely".
Now at this point in time you are probably wondering what ESG is.
We will come to that in a moment.
But first...
When 71% of a US$ 12.9 trillion pool agrees with an investment idea, you would be wise to take note of it.
You see, the core idea under discussion was this...
Once a niche, ESG investing is now a fast growing preference for investors across geographies.
Is ESG new to you?
Well, it stands for Environmental (E), Social (S) and Governance (G).
Asset managers around the globe are prioritizing the integration of material ESG factors when making investment decisions.
This means that when they invest money in a stock of a company, they want the company to be more than a money spinner. ...
... ESG fund managers now want their companies to behave like good citizens and take care of their environment and the society at large. They also want their investee companies to follow a very high level of corporate governance.
This trend, dear reader, is irreversible.
As per data from UN PRI, the value of global assets signing up for ESG inclusion in investment decisions has tripled over eight years, to $40.5 trillion in 2020.
Now, that's big.
And in case you were wondering why it's this big, well, it turns out that being an ESG investor also helps you generate better returns.
More on this in a moment.
First a question that may arise now is this...
Is ESG investing limited to the developed world? Where does India fit into this?
Well, the opportunity for ESG investing in India is even bigger.
Post impact of COVID-19 Indian investors are drawn towards ESG funds.
Between January - March this year ESG funds attracted over Rs 1,700 crore in AUM.*.
Category AUM currently stands at Rs 4,400 crores*.
This proves investors are interested in environmental, social and governance issues and see a positive correlation between sustainability and economic return.
Now coming to what gives ESG funds an edge over regular equity funds? Why is money invested into ESG the world over?
See, ESG funds aim to deliver risk adjusted returns over long term.
The basis being that companies that are strong on ESG have relatively better long-term financial prospects.
Responsibility and profitability of a company in other words go hand in hand.
Evidently, the ESG index better protected downside risk in the stock market mayhem caused by the pandemic. Exactly as it should.
This is surely a wake-up call for investors who think investing in ESG funds would mean compromising on returns.
It's time for you to think the other way round - investing in ESG oriented funds is your opportunity to invest with an aim to make long term return.
Data Source - *AMFI, #JP Morgan

Disclaimer: The views expressed here in this Article / Video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The Article / Video has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of the Article / Video should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. None of the Quantum Advisors, Quantum AMC, Quantum Trustee or Quantum Mutual Fund, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in the Article / video.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

More About the Author

Quantum Mutual Fund has over 14 years of experience into mutual funds and puts the needs of investors like you first. Invest in different types of schemes & start an SIP with Quantum Mutual Funds today! Quantum Mutual Fund believes in sustainable growth built with integrity & transparency and are trusted by over 50,000 active investors to achieve their wealth creation goals. Our aim is to generate sensible, risk returns for your investment horizon.

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