3 Keys to the 2021 Second Half: ESG Bonds | Lord Abbett
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Fixed-Income Insights

Lord Abbett Portfolio Manager Annika Lombardi discusses factors that could influence sustainable bonds in the second half of 2021. 

Transcript

3 Keys to the 2021 Second Half: ESG Bonds

Hi everyone, my name is Annika Lombardi and I’m the lead portfolio manager on Lord Abbett’s Climate Focused Bond Fund. [LOWER THIRD: Annika Lombardi – Portfolio Manager] For the remainder of 2021 we're keeping our eye on three key themes as it pertains to sustainable finance.

Key #1: Potential ECB purchases of green bonds.

First, in Europe we’re watching for any developments in the European Central Bank's bond buying program. [SUBTITLE: After this recording, the European Central Bank (ECB) announced a plan to incorporate climate considerations across its monetary policy activities, including corporate bond purchases, beginning in 2022.] It's becoming increasingly likely that the ECB will favor either sustainable, green bonds or taxonomy aligned bonds in their purchase programs, which could have a significant positive impact on the spreads for those issuers.

Key #2: Potential passage of U.S. infrastructure bill.

Second, here in the U.S., whether or not an infrastructure bill is passed could have significant implications for renewable technologies like solar energy, which might really benefit from an increase in spending going towards green industries.

Key #3: Growth rate of sustainable bond issuance.

Finally, we'll be monitoring the pace of sustainable bond issuance over the second half of 2021. In the first half of this year, sustainable bond issuance is already up over 100% versus 2020, which was in and of itself a record year for issuance [SUBTITLE: Data source: Morgan Stanley.] So it will be interesting to see if both the pace of issuance as well as the record demand for these types of securities from investors can keep pace with the first half of 2021.

Outro

Thank you for listening.

Disclosure

Unless otherwise noted, all discussions are based on U.S. markets and U.S. monetary and fiscal policies.

Asset allocation or diversification does not guarantee a profit or protect against loss in declining markets.

No investing strategy can overcome all market volatility or guarantee future results.

Market forecasts and projections are based on current market conditions and are subject to change without notice. Projections should not be considered a guarantee.

The value of investments in fixed-income securities will change as interest rates fluctuate and in response to market movements. Generally, when interest rates rise, the prices of debt securities fall, and when interest rates fall, prices generally rise. The value of investments in equity securities will fluctuate in response to general economic conditions and to changes in the prospects of particular companies and/or sectors in the economy.

The information provided herein is not directed at any investor or category of investors and is provided solely as general information about our products and services and to otherwise provide general investment education. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as Lord, Abbett & Co LLC (and its affiliates, “Lord Abbett”) is not undertaking to provide impartial investment advice, act as an impartial adviser, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement investor, contact your financial advisor or other non-Lord Abbett fiduciary about whether any given investment idea, strategy, product, or service described herein may be appropriate for your circumstances.

The views and opinions expressed are as of the date of publication and are subject to change based on subsequent developments, and may not reflect the views of the firm as a whole. The information discussed is only for illustrative purposes and is intended to provide general investment education and is not intended to provide legal, tax or investment advice. It is not intended to be relied upon as a forecast or research regarding a particular investment or the markets in general, nor is it intended to predict or depict performance of any investment or serve as a recommendation or offer to buy or sell securities.

Copyright © 2021 Lord, Abbett & Co. LLC. All rights reserved. Lord Abbett mutual funds are distributed by Lord Abbett Distributor LLC.

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