ESG stands for Environmental, Social, and Governance. ESG mutual funds invest in companies that practice business in a sustainable manner covering all three pillars of the ESG framework.
The objective of ESG funds is to generate decent returns by investing in companies that carry out their business covering all three pillars of the ESG framework. They try to promote sustainable business practices.
These funds are suitable for investors who believe in the cause of sustainability and environmental well-being. The returns of ESG funds can vary a lot in different market conditions. We believe that this category is a good option if you want exposure to Indian equity markets. Here, there are no rules on stock selection or allocation. So the fund managers have complete freedom to manage the fund. As these funds invest in stocks with different market caps, they are suitable for investors with a high-risk appetite. We feel that these funds are the best suited for long-term wealth creation. You can consider investing in these funds if you have a minimum investment horizon of 5 years.