All insights

On Wednesday 14th September , TwentyFour Asset Management held its annual investor conference online for the first time.

Green bonds have seen dramatic growth both in terms of market size and media coverage in recent years. In 2019 we saw $237bn of issuance, a 62% increase on 2018’s $146bn, from a mixture of sovereigns, financials and corporates; and in its wake has come a proliferation of dedicated green bond funds.

There are still plenty of potential bumps in the road (Brexit, the US election, COVID-19 developments and so on) but the positive technical created by dwindling supply has the potential to push spreads tighter in coming months.

We expect September to be relatively busy with new ABS deals, but there’s a very strong technical developing in favour of ABS and CLOs, which should help performance in the coming months.

There are a number of countries in Europe where the banking sector remains very fragmented, and while a lot of work has been done in Spain with the mergers of multiple ‘cajas’ in the last few years, there is still scope for further consolidation.

If floating vs. fixed is no longer the most pressing question, then investors should be more focused on where they get the best credit spread.