The issuer mix for green bonds (the proportion of green bond issuers that are corporate, sovereign, local government, etc.) is very different from the overall bond market. Just 13% of total issuance is from sovereign issuers – national governments – versus 59% in the global bond market. The reverse is true for corporate issuance: 49% of green bonds are issued by corporations, versus 19.5% in the global bond market.4
We believe sovereign green bond issuance will rise further, bringing the issuer mix closer to what we see in the global bond market and increasing the size and diversity of the bonds on offer to investors. More national governments have been testing the market, including 2021’s new entrants, the UK and Sweden. The UK issued its first green Gilts of £10bn and £6bn, becoming the largest issuer of 2021 and catapulting itself straight into the top 10 issuers by amount outstanding.
With energy independence and security rapidly climbing the governmental agenda, even more may decide to issue green bonds to finance the transition, rather than rely on external fuel sources or less direct funding. That could create an interesting evolution of the market and offer new opportunities for fixed income investors.
Make an impact with a green bond ETF
Green bonds provide a route forward to shift trillions into projects where they will make the most difference.
Of course, for most people it’s not practical to buy and sell individual green bonds. That’s why green bond ETFs bring together labelled green bonds and provide them for investment in a simple ETF wrapper. The Lyxor Green Bond (DR) UCITS ETF is the original, and still by far the largest with €557 million under management2.
We strongly believe green bonds are a crucial part of the climate transition. That’s why we offer several options for adding green bonds to a portfolio, including our industry-leading aggregate bond ETF, eurozone government green bond, and our corporate green bond ETF.
Discover our range of Green Bond ETFs
1 SIFMA Research Quarterly: Fixed Income – Issuance and Trading, January 2022.
2 Source: Amundi, AUM at 30/05/2022. As of 01/01/2022, Lyxor ETF is part of Amundi Asset Management.
3 Source: Climate Bonds Initiative, data summarised 31/01/2022.
4 Source: Bloomberg. Data retrieved February 2022. Green Bonds as defined by Bloomberg, including those not aligned with the Climate Bonds Initiative Taxonomy.
CAPITAL AT RISK
For complete information on risks in relation to an investment in one of Amundi’s green bond ETFs, please refer to the dedicated “risks warning” section of the prospectus and to the Key Investor Information Document (“KIID”) both available on our websites www.amundietf.com or www.lyxoretf.com. It is important for potential investors to evaluate the risks described in the KIID and prospectus of the green bond ETF before making an investment.
