ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ESG Channel
  2. ESG Bonds May Bounce Back This Year
ESG Channel
Share

ESG Bonds May Bounce Back This Year

Tom LydonJan 12, 2023
2023-01-12

In 2022, the widely observed Bloomberg US Aggregate Bond Index posted its worst annual showing since its inception in 1976. That is to say, plenty of corners of the bond market stand as credible 2023 rebound candidates.

That group includes both corporate debt and bonds with the environmental, social, and governance (ESG) designation. On that note, the SPDR Bloomberg SASB Corporate Bond ESG Select ETF (RBND C) is among the fixed income exchange traded funds that might be worthy of consideration in 2023.

RBND, which follows the Bloomberg SASB US Corporate ESG Ex-Controversies Select Index, could be among the corporate bond ETFs in the spotlight this year because, after a decline in issuance last year, ESG bond issuance is forecast to rebound in 2023.

“ESG bond volumes swelled over the past few years but dropped by 22% in 2022 amid a broader slowdown in corporate bond issues, as companies faced significantly higher borrowing costs due to aggressive monetary tightening actions by global central banks fighting inflation,” reports Reuters. “Corporate ESG bond issuance fell to $362 billion last year from $461 billion a year earlier, Barclays said in a credit research note. It expects ESG bond sales to grow by 30% this year and rebound to almost the same levels of 2021, predominantly driven by green bonds.”

RBND holds 461 bonds with an average maturity of 10.85 years. The fund debuted in November 2020 and could be ready to shine this year because more governments and corporations are committing to climate-related spending – much of it on a sizable scale.

While climate expenditures are expected to pay long-term dividends for a variety of stakeholders, the upfront costs are hefty, indicating many would-be spenders need to tap debt markets to reach climate goals. Enter corporate debt issuance.

“Shifting the planet’s energy system away from fuels that emit greenhouse gases will cost $2 trillion a year by 2030, according to estimates from the International Energy Agency,” notes Reuters. “Companies can secure cheaper financing through green bonds, Barclays said, and their relative appeal has increased even further as investors doubted the key performance indicators used in the less mature sustainability-linked securities.”

RBND, which carries an option-adjusted duration of 7.18 years, could also be appealing to risk-averse income investors due to the fund’s investment-grade profile and when considering credit spreads on highly rated corporate debt have been stable for several months. Over half of the RBND lineup is rated somewhere in “A” territory.

For more news, information, and strategy, visit the ESG Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X