ESG Mutual Funds in India 2026: SBI, ICICI, HDFC and Mirae Compared
Overview of the Indian ESG Fund Landscape
India had approximately 10 ESG-themed mutual funds by 2026, with a combined AUM of around ₹15,000 crore. While small relative to the overall equity fund universe, the category is growing as BRSR disclosures improve the quality of ESG data available to fund managers.
Detailed Fund Comparison
| Fund Name | AMC | AUM | Expense Ratio | 3Y Return | Portfolio Focus |
|---|---|---|---|---|---|
| SBI Magnum ESG Fund | SBI MF | ₹5,800 Cr | 0.46% (Direct) | ~14% CAGR | Quality + ESG screen |
| Mirae ESG Sector Leaders | Mirae Asset | ₹700 Cr | 0.61% (Direct) | ~13% CAGR | Sector leader ESG filter |
| Axis ESG Equity Fund | Axis MF | ₹900 Cr | 0.58% (Direct) | ~12% CAGR | Governance-heavy screen |
| Kotak ESG Opportunities | Kotak MF | ₹1,300 Cr | 0.40% (Direct) | ~15% CAGR | Broad ESG, quality tilt |
| Quantum India ESG Equity | Quantum MF | ₹100 Cr | 0.78% (Direct) | ~11% CAGR | Strict ESG, small AUM |
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What to Look for in an ESG Fund
Portfolio holdings: Does it hold any companies under regulatory scrutiny? ESG screening methodology: Negative screen (exclusion) or positive (best-in-class)? Tracking difference vs. Nifty 50: ESG funds should not consistently lag by >2%. Expense ratio: ESG funds tend to charge slightly more – max 0.65% for direct plans. Fund manager’s ESG research capability: Dedicated ESG team or outsourced?
Greenwashing Risk: How to Spot It
Fund named ‘ESG’ but top holdings include PSU energy companies with high emissions. No published ESG rating methodology or engagement policy. Holdings identical to the large-cap index with minor tweaks. Check: Does the fund exclude obvious ESG violators (specific companies with SEBI enforcement history)?
Bottom Line
SBI Magnum ESG Fund and Kotak ESG Opportunities offer the best combination of AUM liquidity, expense efficiency, and track record for 2026. New investors can start with ₹500 SIP in either via Lemonn’s mutual fund platform. Treat ESG funds as a satellite (10-15% of equity portfolio) until Indian ESG data matures further.
Disclaimer
The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. Lemonn (Formerly known as NU Investors Technologies Pvt. Ltd) do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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