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ESG Mutual Funds in India – Should you invest?

Shitanshu Kapadia
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ESG Mutual Funds in India – Should you invest?

ESG Mutual Funds – ESG investing is a new trend. It is a globally accepted concept. ESG investing means considering Environmental, Social, and Governance factors while evaluating an investment. The mutual funds that evaluate companies over ESG and invest in the companies which are sustainable and socially responsible are called ESG mutual funds. In India, we have seven such ESG mutual funds. If you are aware of ESG investing concept – Great. If not, we are here to discuss What is ESG? Why ESG to be considered? Which are ESG Mutual funds and should you invest in them or not?

ESG Mutual Funds

What is ESG?

ESG investing is used synonymously with sustainable investing or socially responsible investing. While selecting a stock for investment, the ESG fund shortlists companies that score high on the environment, social responsibility, and corporate governance, and then looks into financial factors. So, these types of schemes focus on companies with environment-friendly practices, ethical business practices, and an employee-friendly record.

Environmental Factors –

  • Action on climate change
  • Greenhouse gas emission and reduction
  • Water usage

Social Factors –

  • Standard of labour
  • Health and safety performance
  • Treatment to clients and customers

Governance Factors – 

  • Tax transparency
  • Anti-corruption measures
  • Rules, practice and procedure in place 

Foreign Institutional investors and high net worth individual prefer companies that are following ESG criteria.

Let’s try to understand this concept by example. ITC is name of big company that is involved in multiple businesses such as FMCG, Hospitality, Cigarettes etc. As ITC is involved in cigarette business which is related to tobacco and health related issue it will be not be preferred ESG investment.

Second example is Delta Corporation. Delta Corporation is gaming and hospitality sector company. As it is involved in online casino which is against ESG it will not be preferred by ESG investors.

In India, separate Nifty 100 ESG Index is formulated. The companies with valid ESG score are part of this index. Companies engaged in the business of tobacco, alcohol, controversial weapons and gambling operations shall be excluded.

After looking at definition of ESG here is detail about fund that are ESG funds.

Which are ESG Mutual funds in India?

SBI Magnum Equity ESG Fund

SBI Magnum Equity ESG Fund invest in companies with ESG Criteria. This fund invests in 80% in equity and equity related instruments following ESG criteria. It is high risk fund with very good performance. It is one of the oldest ESG mutual fund.

Aditya Birla Sun Life ESG Fund

Aditya Birla Sun Life ESG Fund objective is to invest in diversified companies that follows ESG themes. It is open ended thematic equity fund that have focused portfolio of 40-50 ESG complaint companies with high growth potential. This fund is launched recently in Dec, 2020.

ICICI Prudential ESG Fund

ICICI Prudential ESG Fund invests in the company with high ESG score. The selection process of investing is based on internal research and Nifty ESG. This fund is comparatively new. This fund has given two digit returns to investors in last three months.

In addition to above ESG mutual funds other ESG mutual funds available in India are Axis ESG Fund, Kotak ESG Opportunities Fund, Quantum India ESG Equity Fund etc.

Should you invest in ESG Mutual Funds?

ESG Mutual funds are high risk thematic fund. This is new category of fund. Most of the fund in this category are new with limited or no track record. It is evolving theme in India. Globally this theme is very famous.

Investor with high risk profile can consider investing in ESG mutual funds. Your investment horizon should be at least 5 years. You can invest maximum of 10% of your portfolio in this theme. You can gradually increase your investment in these funds after evaluating.

10 Healthcare Business ideas in India

Shitanshu Kapadia
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0
10 Healthcare Business ideas in India

Do want to start a healthcare business? If yes, you are at the right place in this post I will share 10 healthcare business ideas in India.

Healthcare is the most promising sector both in terms of making money and employment. The government is focusing more on the health care sector. The health sector in India means health clinics, medical equipment, medicines, health insurance, fitness, and medical tourism.

Covid-19 has changed the lifestyle of everyone. People have become more health-conscious it is mainly due to an increase in life-threatening diseases. The future of the health care industry is very bright. Healthcare business is becoming a profitable business option. Here is a list of 10 Healthcare Business ideas in India.

healthcare business ideas

10 Healthcare Business ideas in India

#1 Yoga Meditation studio or Health Club

Starting a yoga or meditation studio is first on the list. Yoga is a combination of physical exercise and mental meditation and breathing techniques for relieving stress. If you are an expert yoga instructor, you can start yoga classes. If you are a fitness instructor, you can open a health club. A yoga studio can be opened with low investment. However, you require significant investment to start your health club.

 #2 Medical & Surgical Equipment Store

ECG, Stethoscopes & Spare parts, Diagnostic set, X-ray machine, surgical medical gloves, blades, dressing, blood pressure monitor, wheelchairs, hospital beds & medical furniture are examples of medical and surgical equipment that are used widely. You can start a business of medical & surgical equipment store.

#3 Medicine or Pharmacy Store

Medicine or pharmacy store is an evergreen business. You require retail space at a prime location to start a medical store. You require a pharmacy license to start this business. The profit margin in this business is significant.

#4 Pathology Laboratory 

The pathology lab is involved in the study and diagnosis of disease via examination of blood, urine or surgically removed organs. If you hold valid pathology degree you can plan to start your own pathology laboratory.  This business is one of the best health care businesses with a lot of demand.

#5 Diagnostic Center 

A diagnostic center is a place where various diagnostic is performed this includes X-Ray, MRI, CT Scan and other diagnostic tests. As the population in India is high there are shortage of diagnostic center. If you have good space and you can invest lot of money you can open your own diagnostic center. You can also plan to take a franchise of various diagnostic centers.

#6 Herbal and Organic Product Store  

Herbal and organic products are in huge demand. It is an evergreen industry with lot of potentials. If you have good retail space and investment capacity, you can open your own herbal and organic product store. You can keep good branded organic and herbal products in your store.

#7 Nursing Home/Hospital

Nursing homes and hospitals are some of the topmost healthcare businesses. You require land or buildings along with a team of doctors and nursing staff to open a nursing home. You also need to be registered and have licensing approval for opening a nursing home. The investment required for the opening of a hospital is even higher, as you will need more staff, operating theatres, and extensive medical equipment such as ultrasound devices, medical laboratory equipment, and lab spill kit.

#8 Eye Clinic

The eye clinic is business for an ophthalmologist. If you are an ophthalmology practitioner instead of doing job you should open an eye clinic. You can plan to buy an existing eye clinic or build your own from scratch. Along with an eye clinic you can open an eye glass optical store. It is a very good business with a high-profit margin.

#9 Nutritionist or Dietitian 

Good nutritious food is important for reducing your weight. But, nowadays the usage of fast food and junk food has increased. Fast food and junk food generate fat and create many health problems. One of the solutions here is to consult a nutritionist to follow good food practices. If you have done a course of a dietitian, you can open your own consultation business as Nutritionist or Dietitian.

#10 Home Medical Services

Home medical services is one of the best health care business. The population is growing at a faster rate many elder people require home medical services. In this business, you need to act as a bridge between health care professionals and end customers. You can earn a very good commission in this business.

Over to you

I hope you have got complete information about top health care business.

Which health care business you will select and why?

Do share with us in the comment section given below.

Budget 2021-22 – Expectations of Common man

Shitanshu Kapadia
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0
Budget 2021-22 – Expectations of Common man

Union budget 2021-22 –  The budget 2021-22 would be an important event for the common man. Budget will be presented in the parliamentary session on 1st Feb, 2021.

This year Indian economy is going towards a recession phase due to COVID-19 crisis. Although tax collection is very low in the year 2020, common man is expecting major relief with respect to Income Tax and all other financial fronts. Additionally, common man also wants employment generation and more earning opportunities.

The government has collected suggestions of the common man online on MyGov Portal. The suggestion submitted by common man online the portal would be presented in the upcoming parliament session. This means opinion of common man would count in union budget 2021-22. I have complied suggestion by the common man in this post.

Budget 2021

Budget 2021-22 – Expectations of Common man

Income Tax Related Expectations

As of now standard deduction limit is Rs.50000. Suggestion is made to increase this standard deduction limit from Rs.50000 to 1 Lakh.

Investment made up to 1.5 Lakh under section 80 C can be claimed for income tax deduction. The suggestion is given to increase this limit from 1.5 Lakh to 1.9 Lakh or 3 Lakh.

Under section 24 Home loan interest up to 2 Lakh is allowed for deduction. It is recommended to increase this limit by 1 Lakh. This means section 24 for home loan should give benefit of 3 Lakh.

Electrical Vehicle Loan Interest rate exemption should be increased to 3 Lakh. This limit can be applied to all four wheeler purchase using loan.

Leave encashment limit as of now is 3 lakhs it is expected by the salaried people that this limit should be enhanced to 5 lakhs.

For health care workers and doctors specialized tax benefit can be announced. For health insurance income tax exemption under section 80D is Rs.25000 that can be enhanced to Rs.50000 and for senior citizen this limit can be enhanced to Rs.75000.

The government should impose additional tax on super rich. This tax can be in form of Covid relief cess. One suggestion could be that person with income above 20 lakhs needs to pay 1% Covid relief cess.

Insurance Related Expectations 

People have realized benefits of Health Insurance and life insurance in the year. The government is offering benefits of life insurance premium and health insurance premium under section 80C and 80D. But, to boost overall economy the government should extend additional benefits to crop insurance taken by farmer.

Cyber security is also popping up as new risk. To mitigate this new cyber risk, the government should provide some tax relaxations and incentives.

On the indirect tax front, the government can reduce GST rate applicable on insurance premium. This is to boost insurance sector.

Equity and mutual fund related Expectations

As of now on sell of shares (equity) long term capital gain tax and short term capital gain tax is applicable. Common man is expecting reduction or removal in the LTCG and STCG but it is expected that the government shall increase short term capital gain tax from 15% to 20%.

For the mutual funds common man is expecting that dividend income which is currently added to income and taxed as per income tax should be relooked into. The government should remove this clause.

Conclusion

At last I just want to say at time of election when politicians require vote they listen to every demand of people. But when time comes fulfilling it in budget, they simply refuse demand of common man by giving multiple excuse like fiscal deficit, economy etc.

Hope this year in Budget 2021 at least few demands mentioned above will be fulfilled by government.

If you are agreed on suggestion given above, just provide your agreement by sharing this post on facebook and Twitter.

Gold Price History 50 Years – Why you should invest in Gold?

Shitanshu Kapadia
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0
Gold Price History 50 Years – Why you should invest in Gold?

Gold Price History – Gold a yellow shining material is considered a safe haven for investment. Gold is valuable & reliable metal for investment.

Gold consistently gives better returns to investors. In the year 2020, gold has given 25% returns to the investors. The 1 Lakh invested in gold in the year 2019 has become 1.25 Lakh in 2020. However, gold could not perform well in the year 2021. Gold generated very low returns in the 2021.

Gold is likely to give better returns in the year 2022.

In India buying a gold is tradition. Gold is purchased during festivals and during the wedding season. As per me, you should invest at least 2-20 gm gold every year. In this post we will talk about – Why you should invest in Gold? Gold Price history of 50 years and factors affecting gold price.

Also Read – Gold Loan Options in India – Key Features and Documents required

Why you should invest in gold?

The top reasons to invest in Gold are given below.

#1 Hedge Against Inflation

Gold acts as a hedge against volatile markets and inflation. The inflation rate is growing with time. Almost all currencies get depreciated in value with time. Gold is an appreciating asset. Over the long run, gold has beaten almost every asset class and given very good returns to the investors. The gold price has doubled over the last five years and tripled in a decade.

#2 Good returns over long term – Gold Price History – 50 Years

Historically gold has given very good returns to investors. In the year 2020 gold has given 25% return to the investors. In the last five years (2015-2020) gold has generated 14.5% returns to the investors.

 If you have invested 1 lakh in gold on January 1, 2010, today (as on 1st January,2021) your investment would have become 2.80 lakh (around tripled). The gold price history for the last 50 years is given below.

Gold price history -50 years

#3 Portfolio Diversification

One of the top reasons to invest in gold is portfolio diversification. Gold offers good portfolio diversification. Gold partially protect you from market events. You should design your portfolio in a manner that enables you to achieve your long-term financial goals. You should allocate at least 10% of your portfolio to gold or gold-related securities.

#4 Multiple forms of investment

Gold offers multiple forms of investment. You can invest in physical gold, gold jewelry, gold coins, gold bar, gold ETF as well as a sovereign gold bond issued by the government. You can select an investment form based on your need. As per my opinion, Gold ETF is the best way of investing in gold.

#5 Higher Liquidity

Gold offers a higher level of liquidity. Whatever form of investment you have be it a gold coin, gold jewelry or gold ETF you can sell gold anytime. The process of selling gold is quick and easy. There are multiple buyers of gold in the market. If it is a gold ETF it would take 3 business days for settlement and getting cash in your account.

#6 Gold is Tangible

Gold is a tangible asset. You can touch and feel gold. You can purchase physical gold after checking gold purity. Buying gold is relatively easy compared to other assets such as real estate, equity, and mutual funds. Electronic gold can be stored digitally and prone to hacking and other misuses.

#7 Gold does not require specialized knowledge

Gold does not require any specialized knowledge. You require specialized knowledge when you make an investment in equity, real estate, cryptocurrency, and mutual funds. On the other hand, you can invest in gold without any specialized knowledge. It is easy to check the purity of gold. You just need to check the hallmark symbol.

#8 Gold Loan

In bad times, you can also use gold to avail loan. Most of the banks and financial organization offers a loan against gold. You need to pledge gold to avail a gold loan.

Conclusion

Gold offers multiple benefits to investors. Historically gold has generated very good returns for investors. Investment in gold for the short term is not advisable but over the long run, one should defiantly consider gold for investment.

Happy investing 🙂

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