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ESG Investing scaling to new highs

ESG Investing scaling to new highs

Join Chirag Mehta, Sr. Fund Manager, Alternative Investments and Sneha Joshi, Assistant Fund Manager, Quantum India ESG Equity Fund, as they take you through ESG (Environmental, Social and Governance) Investing and how has it gained popularity since its evolution, especially during the pandemic. It illustrates how sustainability and profitability are complementary through its performance in comparison to standard equity indices. The webinar also highlights the challenges in rating standardization and what is the portfolio construction process used for Quantum India ESG Equity Fund.
www.Quantumamc.com

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Quantum Mutual Fund

June 28, 2021
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Transcript

  1. ESG Investing Scaling to New Highs Here's Everything You Need

    to Know Speakers: Mr. Chirag Mehta, Senior Fund Manager – Alternative Investments & Ms. Sneha Joshi, Associate Fund Manager – Alternative Investments June 25th 2021
  2. What is ESG Investing? Replacing the question “how much return?”

    with “how much sustainable return?” ENVIRONMENT SOCIAL GOVERNANCE • Climate Change • GHG Emissions • Water Stewardship • Renewable Energy • Waste Management • Green Buildings • Labor Practices • Corporate Social Responsibility • Stakeholders opposition • Product Liability • Privacy and Data Security • Minority shareholder treatment • Board Independence • Executive Compensation • Corruption • Business ethics and frauds Generic term given to non financial factors that can have a material impact on firm valuation
  3. ESG: From a nudge to a push from all sides

  4. Examples of irresponsible corporate behavior and their consequences SOCIAL Affected

    element Irresponsible behavior Consequence Supplier Low cost suppliers Litigation, bad reputation, product boycotts, Protests by community members and organizations Negative media attention Employee Unfair wages or poor working conditions Strikes and factory shutdowns; liabilities in case of injury or death of employee; sexual harassment cases; inability to attract and retain good talent Customer Low quality raw materials Consumer complaints, refunds, fewer repeat purchases, loss of market share, bad reputation, risk of litigation ENVIRONMENTAL Affected element Irresponsible behavior Consequence Water Inadequate and poor proper waste management system Litigation and fines Bad reputation Protests by community members and organizations Negative media attention Stalled projects Air Use of traditional technologies to produce high-end products which lead to higher pollution Land Unchecked deforestation and mining can make the ground unsuitable for plant life
  5. Stock News Issue Date Share price drop on NSE J&K

    Bank Investigations against the former chairman following allegations that he offered loans worth crores to people recommended by politicians, placed his relatives in plum positions, and for even diverting funds meant for the bank’s corporate social responsibility (CSR) initiative Governance June -19 ~20% in 1 day Sun Pharma A whistleblower email claims Sun Pharma promoter Dilip Shanghvi and his brother-in- law engaged in financial irregularities with stock market scam accused Dharmesh Doshi Governance Dec-18 ~26% in 2 months Manpasand Beverages Deloitte resigned as statutory auditor before Q4 results saying in a letter to the board that the company didn’t provide “significant information.” Governance May -18 ~40% in 2 days Vakrangee Company came under the SEBI scanner for alleged price and volume manipulation of its own scrip on the BSE Governance Feb-18 ~48% in 5 days Vedanta Government rejected Vedanta’s bauxite mining plans in Niyamgiri Social & Environment Jan-14 ~66% in 2 years Satyam Computer Services Chairman confessed to accounting fraud to the tune of ₹7,000 crore and to falsifying revenues, margins and cash balances of the company. One of the largest accounting frauds, which raised serious questions on India’s corporate governance standards as well as the credibility of auditors. Governance Jan-09 ~78% in 1 day Stocks referred above are illustrative and not recommendation of Quantum Mutual Fund/AMC. The Fund may or may not have any present or future positions in these Stocks. The above information of stocks which is already available in publically access media for information and illustrative purpose only and not an endorsement / views / opinion of Quantum Mutual Fund /AMC. The above information should not be constructed as research report or recommendation to buy or sell of any stocks. Evidence of Stock Price Reaction to Negative News
  6. Governance - Board / Management / Ethics Environment and Social

    Externalities' Disruptive Change Growth & Capital Efficiency Financial Strength ESG is more about Identifying Opportunities
  7. 7 *Percentage of studies showing Data Source: Oxford report ‘From

    stockholder to stakeholder’ based on more than 200 academic studies (March 2015) Strong ESG profile More competitive Higher Profitability Higher dividends Strong ESG profile Better risk management Lower risk of severe incidents Lower tail risk Strong ESG profile Low systematic risk Low cost of capital High valuation A Positive Correlation Between Sustainability & Economic Profitability
  8. Regulators across the Globe and Investors pushing up the ESG

    Agenda
  9. The Pandemic as a Sustainability Catalyst Data Source: 1) https://www.unpri.org/pri/about-the-pri

    2) Global Sustainable Investment Review 2016 Please note that the above information is for explanation purposes only. The information provided here is not meant to be considered as investment advice/ recommendation to invest. Please seek independent professional advice and arrive at an informed investment decision before making any investments. UN PRI signatories have multiplied by 40x and AUM has increased from $6.5 tr to $ 80tr from 2006 till date
  10. Top-League Funds gradually moving their Portfolio into the Fastest Growing

    Investment Opportunity Institution Total AUM Blackrock $ 8.6 Trillion California Pensions Fund $ 401 Bn California Teachers' Retirement Fund $ 246 Bn Allianz $ 2.8 Trillion Norges Bank $ 1.3 Trillion T-Rowe Price $ 1.4 Trillion Institution Total AUM Investec $ 53 Bn Natixis $ 1.3 Trillion The Children's Fund $ 27 Bn Hermes Investment Management $459 Bn Nordea $ 317 Bn Swedish Pension $ 459 Bn Data as on 2020. Please note that the above information is for explanation purposes only. The information provided here is not meant to be considered as investment advice/ recommendation to invest. Please seek independent professional advice and arrive at an informed investment decision before making any investments. Data Source: 1) https://www.unpri.org/pri/about-the-pri 2) Global Sustainable Investment Review 3) IPE
  11. 2021 marks the year of mainstreaming ESG globally  Pandemic

    brings renewed focus on sustainability; E & S cannot be taken for granted – challenging the social license to operate  US President Biden nominates new US SEC chair to give a push to tackle climate change and social justice.  EU Taxonomy - an enabler to meet the EU’s climate and energy targets for 2030 and reach the objectives of the European Green Deal​  The United Kingdom announced its strategy to become the first country with mandatory TCFD-compliant disclosure across the entire economy by 2025.  The Government of New Zealand introduced legislation requiring certain financial sector participants to have mandatory climate-related disclosures. Please note that the above information is for explanation purposes only. The information provided here is not meant to be considered as investment advice/ recommendation to invest. Please seek independent professional advice and arrive at an informed investment decision before making any investments.
  12. ESG Investing: Initiation → Development → Mainstream MSCI World ESG

    Leaders Index launched UN Principles for Responsible Investment (PRI) launched MCA issued the ‘Corporate Governance Voluntary Guidelines’ and ‘Voluntary Guidelines for Corporate Social Responsibility (CSR)’ SEBI mandates top 100 listed companies to submit the Business Responsibility Report (BRR) India issued National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business Task Force on Climate- Related Financial Disclosures established. Paris Agreement aiming to limit climate change MCA formulated the ‘National Guidelines on Responsible Business Conduct (NGRBC)’ by incorporating UNGPs Business Responsibility and Sustainability Report (BRSR) mandatory for top 1000 listed companies 2006 2007 2009 2011 2012 2014 2015 2018 2019 2020-21 Bombay Stock Exchange (BSE) published “Guidance Document on ESG Disclosures” Indian law mandated companies spend at least 2% of net profits in CSR activities
  13. Evidence of ESG doing well

  14. As on May 31, 2021. Data Source: MSCI Indexes supplied

    by MSCI Inc, and MSCI ESG Indexes supplied by MSCI ESG Research Inc, a subsidiary of MSCI Inc. Past Performance may or may not be sustained in future. Please note that the above information is for explanation purposes only. The information provided here is not meant to be considered as investment advice/ recommendation to invest. Please seek independent professional advice and arrive at an informed investment decision before making any investments. Sustainability and Profitability are Complementary and Compatible The ESG index outperformed the traditional Equity index over the period and has also protected downside risk better.
  15. 15 As on December 31, 2020. Data Source: Bloomberg, LLP,

    ^Data is from 2011 as Base Date for NIFTY100 ESG Index is April 2011. Past Performance may or may not be sustained in future. Please note that the above information is for explanation purposes only. The information provided here is not meant to be considered as investment advice/ recommendation to invest. Please seek independent professional advice and arrive at an informed investment decision before making any investments. 70 120 170 220 270 320 370 Apr 2011 Aug 2011 Dec 2011 Apr 2012 Aug 2012 Dec 2012 Apr 2013 Aug 2013 Dec 2013 Apr 2014 Aug 2014 Dec 2014 Apr 2015 Aug 2015 Dec 2015 Apr 2016 Aug 2016 Dec 2016 Apr 2017 Aug 2017 Dec 2017 Apr 2018 Aug 2018 Dec 2018 Apr 2019 Aug 2019 Dec 2019 Apr 2020 Aug 2020 Dec 2020 Nifty 100 ESG TRI Nifty 100 TRI Annual Performance (%) Year Nifty 100 ESG Index Nifty 100 Index +/- 2020 22.8% 16.0% 6.9% 2019 12.0% 11.4% 0.6% 2018 6.1% 3.4% 2.7% 2017 33.2% 32.8% 0.4% 2016 4.3% 4.7% -0.4% 2015 -0.8% -1.3% 0.5% 2014 34.3% 34.8% -0.5% 2013 10.0% 7.0% 3.0% 2012 34.6% 32.3% 2.3% Sustainability and Profitability are Complementary and Compatible Nifty 100 ESG Index outperforms Nifty Index and protects downside risk better
  16. 16 Sustainability Initiatives  Business managed by professional CEO despite

    promoter holding of ~60%  5 of 9 Board members are independent  37% of the material from renewable sources  93% of packaging material is recyclable  Implemented responsible sourcing guidelines in 2017 Data Source: Bloomberg, LLP. Past Performance may or may not be sustained in future. Stocks referred above are illustrative and not recommendation of Quantum Mutual Fund/AMC. The Fund may or may not have any present or future positions in these Stocks. The above information of stocks which is already available in publically access media for information and illustrative purpose only and not an endorsement / views / opinion of Quantum Mutual Fund /AMC. The above information should not be constructed as research report or recommendation to buy or sell of any stocks. Past Performance may or may not be sustained in future. Marico
  17. 17 Performance of Quantum India ESG Equity Fund : Since

    Inception (July 2019) Past performance may or may not be sustained in future. This graph should be reviewed in conjunction with detailed performance of the scheme provided on slide number 35 Since inception, QESG based on absolute return has outperformed by 1.54% against the benchmark Nifty 100 ESG Index. 40 60 80 100 120 140 160 180 12-Jul-19 31-May-21 NAV Period Quantum INDIA ESG Equity Fund Quantum INDIA ESG Equity Fund NIFTY100 ESG TRI S&P BSE Sensex TRI
  18. Pitfalls of Sustainable Investing ESG to EHG

  19. Green Washing  Greenwashing is top of the worry list

    for investors when it comes to responsible investing  44% concerned that ESG investments were not what they claimed to be  ESG Investing is looking beyond marketing hype, PR spin and disingenuous promise
  20. Hogwash and Eyewash  Devote resources to improving, quantifying and

    leveraging ESG than just making minor tweak. Enough with a green-hogwash!  Complying with the regulations and laws on paper is not enough. Stop PR-hogwash!  Overt reliance on self-disclosure and self-certification, exaggerated claims without verification by companies, asset managers and sustainable indices. That’s an eye-wash!
  21. Rating Conundrum How to accurately measure a company’s environmental and

    social impact, particularly given that ESG remains an evolving concept and reporting standards are still in their infancy?  ESG ratings diverge substantially among rating agencies.  Correlation among ESG ratings by 5 prominent rating agencies is on an average 0.61.  The information the decision-makers receive from ESG ratings agencies is relatively noisy, resulting in confusion.  MIT Sloan paper “Aggregate Confusion: The Divergence of ESG Ratings” explains 50% difference due to measurement divergence, 13% due to weight divergence, 36% due to scope divergence. Establish open and transparent disclosure standards and ensure that data is publicly accessible is the only way forward. Source: MIT Sloan Research Paper (link)
  22. Like Beauty, ESG lies in the eye of the beholder!

     March towards sustainability – the promise of ESG  ESG is highly subjective in many aspects  ESG is still evolving – no perfected science • Fund house Focus – Governance vs Momentum • ESG Framework evolution • Quality and Depth of Research – no desk research • Long term approach – a market cycle
  23. What is our Idea? Delivering Long term Value from ESG

  24. ESG is the core of investment decision – True to

    Label. In-depth research and due diligence to ensure ESG research is a priority. Funds with active engagement with portfolio companies to get further disclosures and improve practices. Diversified portfolio with no lopsided portfolio in favor of one sector or theme. Financial sustainability is important consideration along with materiality. 24 What investors can look for in an ESG fund?
  25. From “Integrity Screen” in 1996 to E, S, G… 

    1996: Introduced the Integrity Screen  Avoided corporates that treated minority investors unfairly + “sin stocks” -> Focus predominantly on “G” and to a certain extent on “S” factors  2015: Formalized a process of rating companies on their ESG performance • Proprietary rating methodology • Internal research team • Current database: ~140 companies rated on their ESG performance  2019: Launched Quantum India ESG Equity Fund with portfolio construction based on proprietary ESG rating
  26. 26 Our analysis is guided by the materiality of the

    issues Governance sits at the heart of our analysis Typically focus on areas such as capital allocation, board composition, quality of disclosures and treatment of minority shareholders Shortcomings go hand in hand with poor performance on the social and environmental fronts, making it a good proxy for wider problems Identify companies that can act as long term stewards of capital Quantum’s ESG Approach
  27. 27 Data Sources Proprietary research (Blended Approach) Scoring system •Sustainability

    reports (GRI Framework) •Business Responsibility Reports (BRR) and annual reports •Sustainability Accounting Standards Board (SASB) publications •Pollution Control Board Filings •Industry associations (WBCSD, WRI) •News reports •Management interaction Company disclosures (30% weight) Companies are evaluated on their levels of disclosures provided in their sustainability reports / business responsibility reports / annual reports. Companies with higher disclosures get higher scores. Qualitative factors (70% weight) •Evaluate companies on their ESG performance relative to their peers on material ESG aspects. •Check for any past violations / red flags of certain E&S metrics and corporate governance regulations Company disclosures •Binary scoring systems: +1 for disclosure, 0 for non disclosure •Scores standardized from 0 (minimum) to 100 (maximum) Qualitative factors •Negative scoring system: Dependent on relative performance v/s peers or v/s national / global regulations •Penalty for ESG non compliance •Scores standardized from 0 (maximum) to - 100 (minimum) Consolidated score •Ranges from +30 (maximum to -70 (minimum) Approach to ESG Evaluation
  28. Primary Research Publicly available data: (a) Annual Reports, Business Responsibility

    Reports & Sustainability Reports (b) Attend sustainability seminars, conferences (a) Meet ESG Head of the Company and/or Key Management Personnel (b) Visit Plant, including supply chain. Meet dealers, vendors etc. Secondary Research (a) ‘G’ – Board Member review, including directorship review in other companies (b) KMP check, including controversies. Related party analysis (a) ‘E’ & ‘S’ - Check Pollution Control Board filings. Refer NGO reports if available (b) Evaluate v/s global peers Review & Updates (a) Review our proprietary ESG scores every 6 months (b) Active controversy monitoring (a) Primary analyst and a Back-up analyst for each sector ensures continuity (b) ESG Analyst monitor and update material KPIs More Than ‘Desk’ ESG Research
  29. > 125 stocks 40-60 stocks Number of stocks mentioned are

    as per current average trading volume value criteria and ESG criteria. The number of Stock in trading volume criteria, ESG criteria and in portfolio will be changed from time to time based on Investment Strategy of the scheme. Based on Quantum’s proprietary research methodology, companies within the coverage universe are ranked on their ESG performance. The evaluation process consists of a blend of quantitative and qualitative factors. Assign scores -70 to +30 Addressable universe with avg daily traded value of > $1 mn PORTFOLIO ESG COMPLIANCE CHECK INITIAL SCREEN 450+ stocks Investors get exposure to broad basket of ESG compliant companies which in the long run is expected to outperform conventional market indices Companies > ESG score of 0 qualify for inclusion in the portfolio. Allocation is based on the ESG score of the company, with guardrails around Index sector ranges Stock Selection Process Driven by our Proprietary ESG Scores Please refer Scheme Information Document of the Scheme for complete Investment Strategy
  30. Stock with Volume > US$ 1 mn per day? Stock

    under active coverage? ESG Score < internal threshold > Internal threshold for 0.5% weight Included in the Portfolio: ESG score of stock / ESG score of all stocks > 0 Wt of a stock in the portfolio depend on ESG score Min 1%, Max 5% @ cost Maximum Weight for a stock 10% at market value YES Investment Criteria / Sector guardrails For Research Not included in the Portfolio No YES Portfolio Construction, using our Proprietary ESG Scores Please refer Scheme Information Document of the Scheme for complete Investment Strategy
  31. 31  ESG determined stock selection is Value Agnostic –

    Most stock indexes are Value agnostic as well  ESG weighing provides exposure to Quality and Low volatility factors  ESG generally tends to do well in down markets  ESG focus help avoid tail risks  ESG endeavors to deliver long term risk adjusted performance ESG – What Will You Own?
  32. The Triple Bottom-Line: P l anet P eo pl e

    P r o f i t
  33. Quantum India ESG Equity Fund Mr. Chirag Mehta Work experience:

    19 years. Ms. Sneha Joshi Work experience: 8.6 years. Both have been managing the fund since July 12, 2019. Thematic Scheme. Offers an avenue to invest in businesses adhering to sustainable practices that will drive long term performance. Invests based on a comprehensive in-house proprietary research on Environment, Social and Governance aspects. Offers a well-diversified exposure to good quality and sustainable companies with relatively low volatility and downside risk. Long term capital appreciation. Fund Manager Category of Scheme Features Useful for Performance of the Fund
  34. Past performance may or may not be sustained in the

    future. Data as of 31st May , 2021 Load is not taken into consideration in scheme returns calculation Different Plans shall have different expense structure. The Schemes has been in existence for more than 1 year but has not yet completed 3 and 5 years period. Returns are net of total expenses and calculated on the basis of Compounded Annualized Growth Rate(CAGR). For performance of other Schemes Managed by Mr. Chirag Mehta please see slide number 41 & 42. Mr. Chirag Mehta manages 5 schemes of Quantum Mutual Fund. Period Current Value of 10,000 Invested at the beginning of a given period Benchmark Additional Benchmark Benchmark Additional Benchmark Scheme Returns (%) NIFTY 100 ESG TRI (%) S&P BSE Sensex TRI (%) Scheme (Rs) NIFTY 100 ESG TRI (Rs) S&P BSE Sensex TRI (Rs) 1 Year 67.85% 68.15% 61.66% 16,833 16,863 16,209 Since Inception (12th July 2019) 24.79% 23.25% 18.07% 15,200 14,847 13,689 Performance of Quantum India ESG Equity Fund - Direct Plan The Scheme is managed by Mr. Chirag Mehta and Ms. Sneha Joshi. Mr. Chirag Mehta is the Fund Manager effective from July 12, 2019. Ms. Sneha Joshi is the Associate Fund Manager effective from July 12, 2019
  35. Scheme Name Annualised Standard Deviation VaR Sharpe Ratio Drawdown Quantum

    India ESG Equity Fund 20.75% -40.68% 0.9065 -33.15% NIFTY100 ESG TRI 24.75% -48.50% 0.6978 -36.95% NIFTY TRI 25.78% -50.53% 0.4844 -38.27% Bse-30 TRI 26.29% -51.53% 0.4593 -37.91% Past performance may or may not be sustained in the future. Data as of May 31, 2021 Performance of Quantum India ESG Equity Fund
  36. 36 Diversified Portfolio! Quantum India ESG Equity Fund is classified

    as a thematic fund. However, for all practical purposes, the fund is a well diversified portfolio across market caps and across sectors Company Top 10 Holding (Weight %) Tata Consultancy Services Ltd 4.48% Infosys Ltd 4.19% Housing Development Finance Corporation Ltd 4.13% Wipro Ltd 3.45% Tata Motors Ltd 3.39% Marico Ltd 3.17% Tata Consumer Products Ltd 3.15% Tata Communications Ltd 3.12% HDFC Bank Ltd 3.05% Havells India Ltd 3.02% Total Weight of Top 10 Allocation 35.15% Sector Weight % Nifty 100 ESG Index Weight % Consumer Discretionary 29.53% 12.48% Information Technology 16.82% 21.59% Financials 15.34% 28.47% Materials 11.48% 7.82% Consumer Staples 7.88% 12.63% Energy 4.97% 4.36% Communication Services 3.12% 2.73% Health Care 2.78% 4.83% Industrials 1.31% 1.92% Utilities 1.62% 3.15% Cash 5.15% 100.00% Source: Quantum Asset Management Company Pvt Ltd. As of 31st May, 2021 Stocks referred above are for illustrative purpose only and not recommendation of Quantum Mutual Fund / AMC. The Fund may or may not have any present or future positions in these stocks. The above information should not be constructed as research Report or recommendation to buy or sell of any stocks.
  37. 37 QESG BSE-30 TRI Weighted dividend yield 1.05% 1.07% Weighted

    EPS Growth: March 2023E 27.97% 22.66% PEG Ratio (excludes cash) 0.78 0.85 T12M PE 21.95x 19.37x Weightage of stocks with PER < 20 92% 92% Weightage of stocks with PER > 20 8% 8% Weightage of stocks with PER > 30 75% 65% Past performance may or may not be sustained in future. Source: Quantum Asset Management Company Pvt Ltd As of May 31, 2021 Portfolio Characteristics: QESG versus BSE-30 TRI
  38. For diversification across funds and across styles, Quantum suggests, 100%

    Equity 60% Quantum Equity Fund of Funds 20% Quantum India ESG Equity Fund 20% Quantum Long Term Equity Value Fund Quantum’s Equity Allocation Suggestion Please note that the above is the suggested fund allocation only and is not to be considered as an investment advice/ recommendation, please seek independent professional advice and arrive at informed decision before making any investments. Please seek independent professional advice and arrive at an informed investment decision before making any investments.
  39. Investing Money & Making a Difference You Shouldn't Have to

    Pick Between the Two
  40. Quantum Equity Fund of Funds Mr. Chirag Mehta is the

    Fund Manager effective from November 01, 2013. Period 1 year 3 years 5 years Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Quantum Equity Fund of Funds – Direct Plan (Gr) 58.83% 68.04% 11.05% 14.48% 13.40% 15.80% Quantum Equity Fund of Funds – Regular Plan (Gr) 58.42% 68.04% 10.82% 14.48% NA NA Past performance may or may not be sustained in the future. Load is not taken into consideration in Scheme Return Calculation. Data as of 31st May , 2021. # S&P BSE 200 TRI Returns are net of total expenses and are calculated on the basis of Compounded Annualized Growth Rate (CAGR). Different Plans shall have different expense structure. Mr. Chirag Mehta manages 5 schemes of the Quantum Mutual Fund Period 1 year 3 years 5 years Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Quantum Multi Asset Fund of Funds* – Direct Plan (Gr) 20.48% 25.09% 9.59% 12.64% 9.41% 11.70% Quantum Multi Asset Fund of Funds* – Regular Plan (Gr) 20.08% 25.09% 9.33% 12.64% NA NA Past performance may or may not be sustained in the future. Load is not taken into consideration in Scheme Return Calculation. Data as of 31st May , 2021. # Benchmark has been changed from Crisil Composite Bond Fund Index (40%) + S&P BSE SENSEX Total Return Index (40%) + Domestic price of gold (20%) to CRISIL Composite Bond Fund Index (20%) + S&P BSE Total Return Index (40%) + CRISIL Liquid Index (25%) + Domestic Price of Gold (15%) with effective from April 01, 2021. It is a customized index and it is rebalanced daily. Returns are net of total expenses and are calculated on the basis of Compounded Annualized Growth Rate (CAGR). Different plans shall have different expense structure. Mr. Chirag Mehta manages 5 schemes of the Quantum Mutual Fund. Mr. Nilesh Shetty manages 2 schemes of the Quantum Mutual Fund. *With effect from 1st January 2020, the name of “Quantum Multi Asset Fund” has been changed to “Quantum Multi Asset Fund of Funds”. Quantum Multi Asset Fund of Funds Mr. Chirag Mehta Co-managing along with Mr. Nilesh Shetty effective from July 11, 2012. Other Schemes managed by Mr. Chirag Mehta
  41. Quantum Gold Fund Mr. Chirag Mehta is managing the scheme

    effective from May 1, 2009. Ms. Ghazal Jain is co-managing the scheme effective from June 2, 2020 Period 1 year 3 years 5 years Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Quantum Gold Fund (Gr) 2.68% 3.57% 15.20% 16.30% 9.81% 10.89% Past performance may or may not be sustained in the future. # Domestic Price of Gold. Data as of 31st May , 2021 Returns are net of total expenses and are calculated on the basis of Compounded Annualized Growth Rate (CAGR). Mr. Chirag Mehta manages 5 Schemes and Ms. Ghazal Jain manages 2 Schemes of the Quantum Mutual Fund. The Scheme being Exchange Traded Fund has one plan to invest through stock exchange and having a single expense structure Period 1 year 3 years 5 years Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Scheme Returns (%) Benchmark Returns (%) # Quantum Gold Savings Fund– Direct Plan (Gr) 3.71% 3.57% 15.06% 16.30% 9.76% 10.89% Quantum Gold Savings Fund– Regular Plan (Gr) 3.62% 3.57% 14.93% 16.30% NA NA Past performance may or may not be sustained in the future. # Domestic Price of Gold. Data as of 31st May, 2021 Returns are net of total expenses and are calculated on the basis of Compounded Annualized Growth Rate (CAGR). Different Plans shall have different expense structure. Mr. Chirag Mehta manages 5 Schemes and Ms. Ghazal Jain manages 2 Schemes of the Quantum Mutual Fund. Quantum Gold Savings Fund Mr. Chirag Mehta is managing the scheme effective from May 19, 2011. Ms. Ghazal Jain is co-managing the scheme effective from June 2, 2020 Other Schemes managed by Mr. Chirag Mehta
  42. Solutions to meet Sustainable Development Goals: SGD-17 SMILE was born

    out of our desire to support credible NGOs and create a steady stream of money flow for them Since 2018, Quantum MF investors have supported 7 NGOs from diverse sectors via the SMILE facility WHAT IS SMILE? THE SMILE STORY OUTCOME SO FAR SMILE enables Quantum MF investors to contribute 10% of their investment in eligible schemes to charities vetted by HelpYourNGO + = “SMILE”
  43. SMILE Process Flow Q Long Term Equity Value Fund Q

    Equity Fund of Funds Q Dynamic Bond Fund Q Multi Asset Fund of Funds Q Gold Savings Fund Q Liquid Fund Donated to NGOs selected by investors and vetted by HelpYourNGO HelpYourNGO sends donation receipts and 80G Liaises with NGO grantees Monitors & reviews INVEST IN SMILE FACILITY DONATE TO NGO’S DONATION RECEIPTS Investors receive periodic program reports from HYNGO on the NGOs supported by them Investors receive periodic program reports from HelpYourNGO on the NGOs supported by them * Q Stands for Quantum for scheme names
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  49. Disclaimer – Terms of Use The data in this presentation

    are meant for general reading purpose only and are not meant to serve as a professional guide/investment advice for the readers. This presentation has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been suggested or offered based upon the information provided herein, due care has been taken to endeavor that the facts are accurate and reasonable as on date. Quantum AMC shall make modifications and alterations to the performance and related data from time to time as may be required as per SEBI Mutual Fund Regulations. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investment. None of the Sponsors, the Investment Manager, the Trustee, their respective Directors, Employees, Affiliates or Representatives shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the data/information/opinions contained in this presentation. The Quantum AMC shall make modifications and alterations to the performance and related data from time to time as may be required. Please visit – www.QuantumMF.com to read scheme specific risk factors. Investors in the Scheme are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme. Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-). Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956. 24th June 2021 Mutual fund investments are subject to market risks, read all scheme related documents carefully.
  50. Thank You 50

  51. Appendix

  52. 52 Source: Quantum Asset Management Company Pvt Ltd As of

    May 31, 2020  34 of the 48 stocks in Quantum India ESG Equity Fund are not in the Value Fund.  There are 14 common stocks in the Value Fund and Quantum India ESG Equity Fund.  These 14 stocks account for 35% of Quantum India ESG Equity Fund. (53% of the Value Fund) QESG & QLTEVF are Not SAME 35% 65% Quantum India ESG Equity Fund Portfolio Value Fund Stocks Non-Value Fund Stocks
  53.  Provided training to 20,000 unskilled and semi-skilled  Imparted

    training to women in the field of modern-age paint application for homes - increase in monthly income from INR 4-5K to 14-18 K  Business managed by professional CEO despite promoter holding of ~75%  Environmentally friendly products Data Source: Bloomberg, LLP Past Performance may or may not be sustained in future. Stocks referred above are illustrative and not recommendation of Quantum Mutual Fund/AMC. The Fund may or may not have any present or future positions in these Stocks. The above information of stocks which is already available in publically access media for information and illustrative purpose only and not an endorsement / views / opinion of Quantum Mutual Fund /AMC. The above information should not be constructed as research report or recommendation to buy or sell of any stocks. Sustainability Initiatives
  54. 54 MSCI India ESG Leaders Index NIFTY 100 ESG Index

    NIFTY Index BSE 200 Index MSCI India Index Sensex Index Returns Since 2011^ 12.6% 12.1% 10.5% 11.1% 8.0% 10.6% Annualized SD 16.0% 18.0% 17.7% 18.0% 17.0% 17.4% VAR -26.3% -29.7% -29.3% -29.6% -28.0% -28.8% Sharpe Ratio 0.412 0.338 0.250 0.281 0.118 0.264 Drawdown -22.7% -27.1% -29.1% -28.6% -28.0% -28.3% As on May 31, 2021. Data Source: Bloomberg, LLP ^Data is from 2011 as Base Date for NIFTY100 ESG Index is April 2011 Past Performance may or may not be sustained in future.  Higher returns over long duration  Lower downside risk  Less volatile  Sustainable Profitability ESG Indices Versus Equity Indices
  55. Environment Social Governance Issues Opportunity Issues Opportunity Issues Opportunity Climate

    Change Renewable Energy CSR Community welfare Board Independence Responsible Business Reporting Standards Green Financing Alignment with Principles/Frameworks like SDGs Emissions Green Building Employee Welfare, Health & Safety Employee Management & Engagements Data Protection & Privacy Customer Data Safety Green Logistics Impact Assessment Water stewardship Water Mapping Labor & Supply Chain Practises Responsible Supply Chain Management Business Ethnics Biodiversity, Employee & Responsible Business Policies Waste Management Sustainable sourcing Issues & Opportunities