Quantum Mutual Fund files draft document with Sebi for an ethical fund

Quantum Mutual Fund has filed a draft document with Sebi for an ethical fund. Quantum Ethical Fund will be an open-ended equity scheme following an ethical theme.

The objective of the scheme is to achieve long-term capital appreciation by investing in equity & equity-related instruments of companies following an ethical set of principles.

The scheme will be benchmarked against BSE 500 Shariah Total Return Index and will be managed by Chirag Mehta.


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The exit load will be nil on 10% of units if redeemed or switched out on or before 365 days from the date of allotment. Regarding the remaining 90% units, if redeemed or switched out on or before 365 days from the date of allotment, the exit load will be 1% of the applicable NAV. The exit load will be nil if redeemed or switched out after 365 days from the date of allotment.

The minimum application amount for lumpsum investment will be Rs 500 and in multiples of Re 1 thereafter. The minimum application amount for monthly SIP will be Rs 500 and in multiple of Re 1 thereafter with a minimum of 12 instalments.

The scheme will allocate 80-100% in equity & equity -related instruments of companies following an ethical set of principles, 0-20% in debt and money market instruments in compliant with ethical principles.

The corpus of the scheme will invest in shares of companies meeting an ethical set of principles including that of Shariah, Jainism and other ethical principles encompassing a broad Ethical Framework. Such companies meeting the ethical criteria will be further screened through Quantum’s proprietary integrity framework.

These companies will also undergo a financial evaluation, based on a set of metrics, to ensure they are financially sound before being included in the portfolio.

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Ethical Investment Framework

I. Ethical Exclusions

The scheme will avoid investing in companies that generate revenues from:

• Alcohol

• Gambling

• Tobacco

• Vulgar entertainment

• Film exhibition

• Media broadcasting and content

• Film production and distribution

II. Additional Exclusions

The scheme will also exclude companies involved in:

• Mainstream/conventional financial services

• Narcotic substances or anything largely harmful to society

• Leather industries

• Meat and poultry industries or any form of animal cruelty

• Animal testing (including pharmaceutical companies involved in such practices)


III. Financial Screening

In line with certain ethical considerations, financial screening will ensure that portfolio companies have:

• Interest-based debt is less than 25% of total assets

• Interest income is less than 4% of total income

This financial screening is separate from evaluating financial metrics to ascertain a company's financial soundness.

The scheme will be suitable for investors who are seeking long-term capital appreciation and want investment in equity and equity-related instruments of companies following ethical principles.