Fixed income

Graeme Anderson shares five lessons from sustainable bond investing, including how E and S are catching up to G and why Coca-Cola scores higher than Tesla.

In recent months and years we have seen remarkable growth in the number of ESG-focused or sustainable investment strategies being offered by asset managers, a trend that first emerged in the equity market but is now making itself felt in the world of fixed income.

Despite the impressive returns of Euro HY over the last year or so, the backdrop for the asset class continues to suggest there is more upside to come.

For bond investors, evidence of rising inflation represents the most resonant market story of 2021. In in his latest article Mark Holman, CEO of TwentyFour Asset Management (a boutique of Vontobel Asset Management), outlines the considerations for bond investors as they navigate credit market during the remainder of 2021.

The U.S. Federal Reserve’s annual summer symposium in Wyoming represents an important data point for financial markets since it provides valuable clues as to the policy moves the Fed may make in the ensuing twelve months. This year will be no exception and the investor community should listen carefully. It usually chooses not to resulting not only in market volatility but also opportunities.

When combined with other prevalent market dynamics, the favourable ratings trend paves the way for a highly supportive fundamental terrain as we advance through the cycle and one that is ideal for portfolio managers selecting credits.