Bloomberg Launches Green Bond-Tilted Versions of its Flagship Fixed Income Indices
Bloomberg today announced the launch of new green-tilted versions of some of its flagship fixed income indices, including its Global Aggregate, Treasury and Corporate Indices, aimed at enabling investors to increase exposure to sustainable investments with products that maintain similar characteristics of the parent benchmarks.
Green bond issuance volumes have surged over the past several years as companies and governments have increasingly used them to finance their environmental sustainability and transition initiatives. Despite slower volumes last year amidst a broader issuance market pullback, issuances have rebounded, reaching record volumes in the first half of this year, and representing around 9% of global bond market issuance, according to Moody’s Investors Service.
The new products include “20% Green Bond” and “3x Green Bond Tilted” versions of the Bloomberg Global Aggregate, Bloomberg Global Corporate, and Bloomberg Global Treasury Indices. The company noted that the year-to-date return for the Bloomberg Global Aggregate 20% Green Bond Index is 0.75% above that of its parent benchmark, which it said highlighted the opportunity for additional returns for investors with an appetite for sustainability-focused investment.
Bloomberg said that the indices can be further customized to meet specific individual investor needs with additional fields such as business involvement exclusions, EU Taxonomy inputs, regulatory screens, and custom sector weightings, and noted that a custom Bloomberg Euro Treasury Green Bond Tilted Index has been licensed to Amundi for the launch of a new ETF.
Jonathan Gardiner, product manager for Sustainable Indices at Bloomberg Index Services, said:
“Sales of green bonds have reached record highs this year, up more than 10% compared to volumes for the same period last year, while the broader sustainable debt market has soared past new heights to $7 trillion historically, and Bloomberg Indices has closely tracked this growing trend to provide investors with myriad ways to introduce and benchmark this market to their portfolios.”