Green bond indices versus the overall market – what are the performance drivers?
Reading time:10 MIN
“Green bonds perform better than comparable bonds without a sustainability character.” This generalised thesis is heard time and again on the bond market and we have systematically investigated this statement. In doing so, we have gained interesting insights that both confirm and refute it. Due to structural differences between the two bond segments, it simply depends on the timing and the market phase.
We look at the structural differences between a green bond index and the overall market, and show in which market phases the respective index performs better or worse. The aim of this article is to give the reader a concise overview of the past and possible future performance drivers of green bonds.
Authors
Felix Stern
Felix Stern joined the Asset Management division of Berenberg in 2000 as a fixed income portfolio manager. Currently he is heading the fixed income selection team within the Asset Management and is responsible for institutional mandates. As a senior portfolio manager he is responsible for the selection of corporate and financial bonds as well as short-term bond market investments. He is also the lead manager for several of Berenbergs institutional mutual funds. Prior to joining Berenberg, he worked several years for the Market Research department of British American Tobacco, Germany. Felix is a CCrA - Certified Credit Analyst (DVFA) and also has a German Diploma in business economics from the Fernuniversität in Hagen.
Felix Stern
Head of Fixed Income Euro Balanced
