A STUDY ON IMPACT OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE ON MUTUAL FUNDS PERFORMANCE IN INDIA

Abstract

The present study analyzed the Environmental, Social, and Governance (ESG) aspects of selected mutual funds—namely, SBI Fund, Quantum Fund, Axis Fund, ICICI Prudential Fund, and Aditya Birla Sun Life Fund. The study was based on descriptive research using secondary data, and employed key performance indicators such as Alpha, Sharpe Ratio, Beta, and Standard Deviation to assess risk-adjusted returns and volatility. The results indicate that ICICI Prudential Fund demonstrated superior performance, with higher Alpha and Sharpe Ratio values, suggesting that it delivers better returns with lower relative risk. On the other hand, Aditya Birla Sun Life Fund recorded the highest Beta and Standard Deviation, signifying increased volatility and overall investment risk. Additionally, the higher expense ratio associated with this fund may further diminish investors' net returns. Based on these findings, it can be concluded that ICICI Prudential Fund is better suited for investors looking for consistent performance and efficient risk-adjusted returns, whereas Aditya Birla Sun Life Fund may cater to investors with a higher risk appetite. The study highlights the critical need for investors to evaluate both performance indicators and cost structures when selecting mutual funds.