What are the newly emerging ESG funds?

ESG funds is comparatively a newer concept in India. These funds are known to be as though a benchmark for investors potential or existing ones to judge whether the said company deals in any kind of business or whether or not it takes measures to contribute to the betterment of the environment, how they treat their employees, what their relationship with their suppliers are and moreover, if they carry our business in the most legal manner. It is also necessary to understand that although ESG funds are a part of fund management, it is a specialized concept in itself.

Another reason that businesses, especially the growing ones will need to inform themselves about the concepts of ESG funds so that when the time comes, they aren’t caught totally off guard. This concept of the ESG funds is also being applied to figure out the possibility of material risks and any growth opportunities.

ESG, which stands for environmental, social and governance funds is also alternatively known as socially responsible investing or sustainable investing. In the environmental factors, the ones that are covered usually deal with scrutinizing air emissions and air quality or energy usage and conservation. Plus, there is also the land use and use of natural resources, assessing waste management and quality of water, and also gauging whether or not in making the product, there is usage of any hazardous materials.

In the social factors, as said earlier, the relationship with employees, suppliers, clients and communities are judged. Here they see if the labour standards are met and followed, production quality and safety is taken care of and there are equal employment opportunities provided at the job.

In the governance bit, shareholder rights, risk controls, and company leadership is assessed. While investing in any business, the company judged if there are ethical business practices, proper voting rights in place for the shareholders, and independence of board and diversity in it.

What are long-only funds?

Until a couple of months ago, the overall aspects of growth in terms of the economy and the capital markets were quite high, until the COVID-19 hit the economy world wide and the markets came crashing. Back then, it was clear that the investments in stock market could go through many frequent ups and downs, turning sharply in some major sectors too. This lesson remains valid even right now, with the economy slowly opening up. The long short funds in India or anywhere else in the world are actually and alternative to the investing.

The usual investment philosophies that were deemed to be a sure shot method of gaining returns did miss many targets that were set. So, what could risk takers do in such a situation? Well, they chose the long-short style of alternative investing.

With investments in the long short funds in India or anywhere else in the world, is the biggest strategy in hedge funds and 3^rd category of the AIF, that is, the Alternative Investment Fund. With the help of this strategy, the fund or asset manager expects to participate in and profits with the rise and fall we see in some stocks. In this long-only funds strategy, the said fund or the asset manager chooses to either take a buy position or goes long in the stocks we referred to before, that he or she thinks has the potential to go, and sells or goes short on stocks, without actually having the delivery in stocks which are high-priced with sole same of making a profit. It is important to remember that the asset managers can take the wrong decision and go in the wrong direction of the strategy or sometimes even while selecting the stock which can cause losses. Strategies like these can form a part of the process of asset allocations of the portfolio of investment on the basis of the volatility and concentration of risk in the funds.

Why do you need an asset management company?

Which asset management company to choose is the biggest question when we have to choose the financial advisory services for our business. When you set up a business, you first do it with the intention of not just earning profits, but to have a steady growth along the way. While the initial capital needed might be put in through investors, eventually, you have to start earning profits for your business. The profits that you get is the money that is left once you have paid your employees, suppliers, dividends to the investors, and the rent (if applicable). This profit you have can be put to either of the two uses. Initially, it has to be about managing the business and putting it to use for the betterment of the business. Second option is to be put in for investment, to secure the functioning of your business, so that you have something known as the back up capital.

To strategically raise this capital, it is important that you hire some great financial advisory services. These services help you understand the journey for your business ahead in terms of the finances. When you meet an asset or a wealth manager, your profile is judged on the basis of the goals that you want to achieve for your business in the future. Your present margin of profits and tentative growth is then analyzed. Having a back up capital is very important for any business, especially since it could be required during the time of expansion, or if and when the business goes into any crisis. The backup capital is what will save the business from falling and will keep it floating, at least sufficient enough to keep the business running well.

Therefore, this is house a company that deals in financial advising helps their customers become self sufficient in times of crisis.