“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 Berenberg Asset Management more than 25 years ago as a fixed income portfolio manager. Today, the Senior Portfolio Manager heads the Fixed Income Euro Balanced team and is responsible for the selection of defensive bonds from the investment grade segment as well as specializing in short-dated bond concepts. He is also the main portfolio manager responsible for several Berenberg mutual funds. After several years in the market research department of British American Tobacco (Germany) GmbH, the trained industrial clerk switched to fixed income portfolio management at the beginning of 2000. The graduate in business administration completed his studies part-time at the distance learning university in Hagen and also obtained a degree as CCrA - Certified Credit Analyst (DFVA) as well as CESGA – Certified ESG Analyst (DVFA).
