The fast-growing market for impact credit offers investors a rich source of opportunity and diversification. Nuveen portfolio managers Stephen Liberatore, CFA® and Jessica Zarzycki, CFA® discuss the trends and opportunities, from global issuance and innovative transactions to defining impact and balancing competing objectives.
Q: What issuance trends are you seeing in the sustainable bond market versus the broad bond market?
SL: We’re likely to eclipse $1 trillion dollars of issuance this year for bonds labelled green, social and sustainable (GSS). The market will have over $5 trillion of historical issuance, and over $4 trillion of market value outstanding. While GSS labels aren’t how we define impact at Nuveen, it’s a very good proxy for the market growth.
That $5 trillion in issuance shows the maturation of the market. And it also allows us to position portfolios to perform, regardless of the market environment, in a broadly diversified way.
We see impact opportunities not just in corporates, but across most bond market sectors, including sovereigns, supranationals, asset-backed securities, residential and commercial mortgage-backed securities, municipals, agencies, emerging markets and high yield.
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