October 23

Why Is This Emerging Markets Bond Performing So Well?

By Ben Hernandez

While the case for environmental, social and governance (ESG) investing is almost a no-brainer given the sector’s recent performance and despite stricter measures on cracking down on ESG funds, emerging markets might be on the opposite end of the spectrum. Or are they? This certain bond fund combines both worlds and has been doing quite well as of late, according to a recent Bloomberg article.

The obvious question might be what does the fund have? However, it’s what the fund doesn’t have.

“A top-performing emerging-market bond fund is avoiding investments in Russia, China and Saudi Arabia as the three countries score too low in its ratings for environmental, social and governance risks,” the article said. “The $1.5 billion Candriam SRI Bond Emerging Markets Fund has outperformed almost 90% of peers in the past three years and screens for ESG factors. The bottom 25% of countries on the fund’s ranking get blacklisted, no matter how big a role they play in the bond world.”

Photo courtesy of Adeolu Eletu.

Source: ETF TRENDS (link opens in a new window)

Energy, Investing
ESG, impact investing