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
Bennelong Funds Management has signed a memorandum of understanding with US private credit manager Monroe Capital to distribute its products in Australia.
Global equity manager Talaria Capital has appointed a Sydney-based sales director as it grows its distribution presence across Australia.
Global private markets firm Partners Group has launched an evergreen fund to provide Australian advisers with access to its cross-sector royalties strategy.
Franklin Templeton has reduced fees for two of its Brandywine fixed income funds and enacted a name change for its Global Income Optimiser fund.
