Apprehensions over climate change, an emphasis on global pension funds over the integration of ESG in their investments, and new markets will fuel demand for this type of bond.
At the end of 2016, 72.0% of the $180.0 billion climate-aligned bonds were listed in the stock exchanges.
The World Bank has projected an annual investment by cities of $100.0 billion through 2050 to prevent the harmful impact of climate change.
French aerospace firm Safran SA (SAF FP, +10.52%) edged out London Stock Exchange Group Plc (LSE LN, +10.38%) as the top International Moat Index performer in April. SAF FP also…
The international moat index, represented by the Morningstar Global ex-US Moat Focus Index, lagged behind the benchmark index in April.
A higher allocation to Asia could certainly provide diversification benefits to investors while enhancing their risk-adjusted returns.
The EAFE Index provides exposure to slow-growing developed markets while disregarding Asia’s fast-growing markets (FXI) (INDA).
The correlation between US and international markets varies depending on market cycles.
In the short term, Asian benchmarks and ETFs have also performed better than US-focused funds.
Many Asia benchmarks covering high market capitalization across the region provide exposure only to Chinese stocks (FXI) (EWH) listed in Hong Kong, also known as H-shares.
Although American investors have focused on domestic markets in the past, investors seeking long-term capital appreciation need to focus on Asia as well.
The rapid rise in income levels and robust population growth in Asian nations (AAXJ) should sustain strong consumption growth.
Total factor productivity measures increases in overall output due to technological advancement without an increase in inputs.
For the last three decades, Asia has posted higher economic growth than any other region of the world.
Asian economies’ rapid urbanization is notable. A shift is expected to unfold in the next few decades, which should boost development and business growth.
The yuan remains a focus of attention of the international community and a key risk for China’s macroeconomic stability in recent years.
Government bond yields in China are higher than its Asian counterparts such as South Korea and Singapore and much higher than major developed markets.
With the onset of reforms, foreign holdings in China’s onshore bond (EMB) (PCY) market is gradually increasing.
Many leading bond index providers are still not including China’s onshore bonds in their benchmark indexes due to various regulatory and operational concerns.
In the third and final phase of bond (EMB) reforms that began after 2015, the substantial activities of the market were open to global investors.