Elevating fixed income  

How to create a sustainable bond portfolio

  • To be able to summarise how sustainable fixed income investing works.
  • To be able to explain the advantages and risks of sustainable fixed income.
  • To be able to list ways to assess different fixed income investments.
CPD
Approx.30min
How to create a sustainable bond portfolio
The risks and rewards of sustainable investing in fixed income
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Sustainable fixed income has proliferated in recent years.

According to Morningstar data, there are now 476 sustainable bond funds registered in the UK; this compares with 126 in 2013 and just 31 in 2003. 

Within this, the global social bond market has also expanded, with 10 funds now available to UK retail investors that have a specific basic human needs or development theme.

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Bond instruments that are created specifically to fund an ESG aim, known as GSS+ (green, social and sustainability) bonds, should be distinguished from sustainable fixed income strategies.

The latter may or may not invest in GSS+ bonds, as they may (also) invest in bonds that conform to sustainable goals, but are not dedicated to sustainability.

But whether advised clients want specialist GSS portfolios or a sustainable strategy overlay on their investment portfolios, there are plenty of choices available. 

The CPD report, written by financial journalist Imogen Tew, will enable you to list ways to create an ESG-friendly bond portfolio, summarise the advantages and the risks, and enable advisers to explain how to assess different fixed income investments.

Click on the image above to read the report.

simoney.kyriakou@ft.com

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. According to Chapplow, there are three ways investors can engage with corporates and sovereigns. Which of the following is NOT one of the three things she mentioned?

  2. Name one of the private investment markets that can help provide a positive social outcome, according to Dixon.

  3. Which company does Luis highlight as one that suffered by not actively considering ESG in its business strategy.

  4. Man says: "If you're not paying attention to those ESG factors, you’re not doing your job properly". True or false?

  5. What is the main risk in the labelled bond part of the market, according to Chappow?

  6. What does Mills say is one risk with positive screening?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • To be able to summarise how sustainable fixed income investing works.
  • To be able to explain the advantages and risks of sustainable fixed income.
  • To be able to list ways to assess different fixed income investments.

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