The strategy excludes companies that derive a predominant share of revenue from sectors such as defence, alcohol, tobacco, gambling and meat-related businesses.
The investment approach seeks to align investments with principles of sustainability, governance and societal well-being while targeting long-term wealth creation.
According to the company, the portfolio will focus on businesses that demonstrate strong governance and transparency, align their operations with constructive societal outcomes, and exhibit quality metrics such as return on capital employed (ROCE), return on equity (ROE), earnings per share (EPS), compounded annual growth rate (CAGR) and free cash flow (FCF) growth.
Navneet Munot, MD and CEO of HDFC AMC, said the strategy is based on the belief that long-term value creation goes hand in hand with sustainable growth, strong governance and responsible business conduct.
The strategy will also seek companies with long-term growth potential and efficient capital allocation practices.
Under its investment framework, the portfolio will avoid investing in companies generating revenues predominantly from defence, alcohol, cigarettes and tobacco products, dairy products, leather products, animal testing, meat and poultry industries, businesses engaged in serving meat or alcohol, and gambling and betting activities.
Ashish Jagnani, Senior Fund Manager – PMS and AIF at HDFC AMC, said the investment approach combines ethical principles, research-driven stock selection and a focus on sustainable growth with the aim of delivering long-term risk-adjusted returns.
As of March 31, HDFC AMC’s PMS business managed assets worth ₹10,573 crore across its various investment approaches.
HDFC AMC offers discretionary, non-discretionary, advisory and co-investment services under its PMS business.
Shares of HDFC Asset Management Company ended 1.33% higher at ₹2,657.90 on the BSE on Tuesday (June 16).
