Performance Of ESG Mutual Funds During The COVID-19 Pandemic - A Study Of Indian Mutual Funds

Abstract

In the last decade, Environmental, Social, and Governance (ESG) investments have gathered significant attention and interest from both investors and customers globally. Over the past five years, this rises in interest for ESG investing has also made notable developments within the Indian financial viewpoint. Renowned asset management firms have introduced their own ESG programs, effectively attracting investors who are increasingly drawn to Socially Responsible Investments (SRI). This growing interest has been particularly evident during the financial instability caused by the outbreak of the COVID-19 pandemic. SRI investments, which are rigorously evaluated based on Environmental, Social, and Governance (ESG) criteria, have emerged as a key avenue for investors seeking to align their financial goals with broader societal and ethical considerations. ESG information plays a pivotal role by allowing investors to assess not only the financial risks associated with a particular firm but also how that firm intends to manage and mitigate future risks. During this growing interest in ESG products, our study seeks to investigate the value addition that ESG performance offers to investors during crisis periods, such as the recent pandemic-induced financial crisis. This research undertaking involved a comprehensive evaluation of the performance of the selected ESG mutual fund schemes and the examination of a diversified portfolio by using secondary data. The findings reveal that financial services and technology sectors were particularly attractive to ESG-integrated assets. The primary objective of this study is to gain a deeper understanding of the evolving landscape and growing popularity of ESG mutual funds in India. Key insights from the study indicate the changes in ESG fund investments in India. Academicians, investors, business professionals, and research scholars can use this study as a valuable resource and foundation for their own research and investment strategies.