As sustainable bond markets expand into new sectors and across more impact themes, so does the portfolio construction playbook and the ability to add value through ESG due diligence. In this article, we cover our ESG fixed income approach and provide examples of impact options that we’ve invested in and some that we’ve avoided.
In this quarter’s commentary, we consider how investor risk perception at any point in time may not be a good reflection of reality at either the market or individual stock level. In particular, we’ll take a closer look at how sustainability risks can lie hidden in the background.
One recent news article posits that the PG&E bankruptcy has exposed “blindspots” in sustainable investing, while another argues that sustainability analysis can help investors identify companies that may be skating on thin ice. Can both views be true?
Volatility has returned, and we expect it to have continuing significance as we look out at 2019. In this environment, long-term investors who comprehensively assess risk, ESG factors and valuation have the potential to identify attractive opportunities at the asset class and security level.