Fund conversions see green bond assets pass $22b
Green bond assets reached €13.8 billion ($22.8 billion) across 63 strategies at the end of the first half of 2020 after seeing growth of 30%, according to Fitch Ratings.
This compared to a contraction of 0.6% for total bond funds globally over the same period.
There were 63 green bonds funds in the market, with the largest share of issuance coming from China, but their assets made up just 0.14% of total bond funds assets under management.
As well as new launches, Fitch said it was seeing existing conventional bonds funds being converted to green ones.
“The Federal Global Green Bonds Fund, which was launched in 1980 as a conventional bond fund, converted to a green bond strategy in early 2020,” it said.
“Recent green bond fund launches have varied from the aggregate strategy of mixed SSA and corporate exposure to include corporate-focused and short-duration funds. Fitch believes some existing funds have selectively increased corporate exposure, supported by increased corporate green bond issuance.”
Fitch Ratings said the credit allocations in these types of funds tended to be clustered around the lower end of investment grade and had higher BBB allocations and lower AAA ones.
Average duration was 6.3 years, compared to eight years for the ICE BoA Green Bond Index.
AUTHOR
Laura Dew
Recommended for you
Tribeca Investment Partners has made a distribution hire from Australian Ethical in a newly-created role focused on the national intermediary market.
Asset managers may be urged to diversify their product ranges, but investment executives have warned any M&A deal should avoid simply filling gaps and instead consider long-term value creation.
Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equity firm.
Fund managers are entering 2025 with the most bullish sentiment since August 2021 and record high allocations to US equities, thanks to the incoming Trump administration.
