Upcoming NFO: Baroda BNP Paribas Mutual Fund Files Draft for ESG Best-In-Class Strategy Fund

Baroda BNP Paribas Mutual Fund has filed the scheme information document for the Baroda BNP Paribas ESG Best-in-Class Strategy Fund, an open-ended equity thematic fund.  

The New Fund Offer (NFO) is scheduled to open on February 12, 2026, and close on February 26, 2026, with units offered at ₹10 per unit. The scheme will reopen for continuous purchase and redemption within 5 business days after allotment.  

Investment Objective and Structure 

The scheme seeks long-term capital appreciation through equity and equity-related investments in Indian companies assessed on environmental, social and governance (ESG) criteria.  

It follows a sector-based “best-in-class” approach, selecting companies with higher ESG scores relative to peers. The scheme does not provide any return guarantee.  

Asset Allocation and Investment Universe 

Under normal conditions, the fund plans to allocate 80-100% of assets to ESG-aligned equities, with up to 20% in other equities, debt or money market instruments, and up to 10% in mutual fund units and InvITs.  

Foreign securities linked to the ESG theme may account for up to 20% of net assets. Equity derivatives may be used for hedging and portfolio balancing.  

Selection Filters and ESG Methodology 

Portfolio construction will use ESG ratings from a SEBI-registered third-party provider along with internal assessment. Companies will be ranked within sector groups, with the fund considering firms in the top 5 deciles of ESG performance.  

Companies involved in tobacco, alcohol, gambling, or with high adverse environmental or social impact are proposed to be excluded. At least 65% of assets will be invested in companies reporting on BRSR with core disclosures.  

Benchmark, Risk and Key Terms 

The scheme will be benchmarked against the Nifty 100 ESG Total Return Index. The riskometer classifies the scheme as Very High Risk, reflecting its equity exposure. Minimum investment is ₹1,000 for lump sum and ₹500 for SIP. An exit load of 1% applies on redemptions above 10% within one year, with no exit load thereafter.  

Expenses and Fund Management 

The estimated total expense ratio for the regular plan is up to 2.25% per annum, with lower expenses for the direct plan. The scheme will be managed by Jitendra Sriram and Kushant Arora, who manage other equity schemes within the fund house.  

Read More: Baroda BNP Paribas Money Market Fund Marks 6 Years with AUM Surpasses ₹4,500 Crore! 

Conclusion 

The filing introduces an ESG-focused equity thematic fund with a sector-relative ranking framework, aligned to the Nifty 100 ESG index and structured as a high-risk equity product. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Mutual Fund Investments are subject to market risks, read all the related documents carefully before investing.