Sustainable and Impact Bond Funds: An Evolving Terrain

The global sustainable bond landscape grew in both size and diversity over the past decade with the growth of the asset class of green, social, sustainability, sustainability-linked, and transition bonds (GSS+). For investors looking to add green bonds into their portfolio, GSS+ bonds exist within the funds focusing on impact. However, they should remain cognizant of the inherent biases of this universe, which can severely affect performance over the short to medium term.

This paper examines both the broader sustainable bond fund universe and the growth of GSS+ bonds in the past year.