Mega Pivot: HDFC AMC Unveils 'Growth for GOOD' Portfolio with Strict Ethical Exclusions

Mega Pivot: HDFC AMC Unveils 'Growth for GOOD' Portfolio with Strict Ethical Exclusions​

HDFC Asset Management Company Limited has introduced a highly specialized investment mandate, the HDFC Growth for GOOD Portfolio. Launched on June 10, this new offering is specifically designed to meet investors who seek long-term wealth creation while ensuring their capital aligns with ethical principles and societal well-being standards.

The portfolio aims to move beyond conventional returns by focusing on "non-harm and sustainability." The investment approach ensures that participating companies not only achieve disciplined growth but also demonstrate a commitment to strong governance and transparency throughout their operations.

Defining the Growth for GOOD Investment Mandate​

The HDFC AMC portfolio is strategically designed for investors who want their capital deployed in organizations committed to ethical conduct and sustainable practices. Selection criteria are rigorous, focusing heavily on measurable quality metrics within potential investments.

These include analyzing a company's return on equity (ROE), return on capital employed (ROCE), earnings-per-share growth, compounded annual growth rate (CAGR), and free cash flow growth. The strategy mandates that companies possess long-term growth potential coupled with efficient capital allocation.

Strict Ethical Exclusions Anchor the Strategy​

A fundamental aspect of the HDFC Growth for GOOD Portfolio is its explicit set of exclusions. To uphold its stated principles of non-harm and sustainability, the portfolio will actively avoid equities from several sensitive sectors.

The exclusion list is comprehensive and includes businesses engaged in gambling or betting. It also restricts investments involving tobacco products, alcohol, meat or poultry industries, leather products, animal testing, and dairy. Furthermore, companies that generate revenue predominantly from defence are also excluded.

A Commitment to Sustainable Value Creation​

Navneet Munot, Managing Director and Chief Executive Officer of HDFC AMC, underscored the philosophy behind this launch. He stated, "Investing is not just about creating wealth, but also about shaping the kind of future we want to build."

Munot added that the Growth for GOOD Portfolio seeks businesses that successfully combine sustainable growth with responsible conduct and strong governance. This strategy is anchored in the belief that long-term value creation must be good for society, good for people, and good for the planet.

Ashish Jagnani, Senior Fund Manager - PMS and AIF at HDFC AMC, confirmed the portfolio’s objective. He noted that the mandate aims to pursue ethical principles through robust research, delivering healthy risk-adjusted returns over the long term while promoting sustainable growth.