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IDEAS AND KNOWLEDGE TO INSPIRE YOUR INVESTMENTS THINKING
19 May 2022

Impact bonds build momentum in developing markets

Investing responsibly in emerging markets is increasingly seen as a way to support meaningful positive environmental and social outcomes in developing countries.

 

Initially the market was dominated by financials and sovereign issuers from China, South Korea, and India. Since 2019 however, the asset class has rapidly evolved and grown, with more than US$250bn outstanding as at April 2022, issued by 49 countries overall1. The hard currency emerging market impact bond universe now includes over 200 issuers2, across all major sectors.

 

As investors look to identify areas offering potentially attractive total returns and positive impact, emerging market impact bonds are becoming difficult to ignore. With an increasingly diversified, rapidly growing opportunity set, they can combine the potential structural yield premium on offer in emerging market debt with the positive impact needed to support the delivery of the UN Sustainable Development Goals and address key issues facing people, the plant and prosperity.

 

Simon Cooke, portfolio manager, emerging markets, Insight Investment.

 

Doc ID: 983500

 

1 Bloomberg as at 20 April 2022.
2 Ibid.

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Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA), BNY Mellon Fund Managers Limited (BNYMFM), BNY Mellon Fund Management (Luxembourg) S.A. (BNY MFML) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA, BNY MFML or the BNY Mellon funds.

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