Article
Asian Green Bonds May Offer Resilience in Volatile Markets
Maynard Xu, Credit Analyst
Global “Green Bond” issuance has increased dramatically in recent years, including in Asia. Growth is set to continue as investors demand “green financing” for major projects like infrastructure and renewable energy.
Highlights
- The March Covid-19 and liquidity driven market sell-off was arguably the first real test of the Asian Green Bond market and it fared well. During March and April, Asian Corporate Green Bonds significantly outperformed traditional Asian corporate bond indices.
- We believe this outperformance is explained by several factors, including Asian corporate Green Bonds’ more stable investor base, their bias toward less cyclical sectors, their generally higher credit quality relative to benchmark indices and growing investor sponsorship of the asset class.
Investment risks
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The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors.
Important information
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Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.
