Labeled Green Bonds’ Significance to Investors
Global climate leaders have set a $1 trillion target for green finance by 2020, which would require a tenfold increase in global green bonds issuance.
Green bonds carry the same risk-return profile as conventional bonds. However, these bonds fund projects focused on energy efficiency, clean water, transportation, biodiversity, and sustainable waste management.
Green muni bonds accounted for 56% of US green bond issuances in the first half of 2017 and are expected to touch $10 billion this year.
Over the last ten years, the green bonds (GRNB) universe has expanded and diversified, holding 600 bonds from 24 countries in 23 currencies.
It is estimated that $93 trillion of infrastructure investment is needed in the next 15 years to transition to a low-carbon economy.
As with most timeframes in the market, the laggards are a mix of surprising and obvious names (in hindsight, of course). This October, they stand out a little more than usual since so many asset classes are up this year.
For over a year now, Mexico has faced criticism from Trump for various reasons. He still wants to build his well between the United States and Mexico.
Since early September, US ten-year and longer-dated paper has been falling. Rates for the US government ten-year bond jumped from 2.04% on September 7 all the way to 2.36% on October 10.
If, in real estate, everything is “location, location, location,” then with natural gas investing, everything is “weather, weather, weather.”
Gold has had a solid year so far, up 13.5% through mid-October. And though it peaked in early September at over $1,350 per ounce, it had a quick drop back to $1,261 in early October only to bounce back over $1,300 in mid-October.
As we move into the season of Pumpkin Spice Lattes, many sectors in the market have given investors more treats than tricks this year.
Investor complacency doesn’t hide the fact that there are financial risks to QT. Forty percent of the Fed’s balance sheet unwind is in mortgage-backed securities at the same time that the housing market is showing signs of slowing.
Since the financial crisis, the stock market has risen consistently as long as the Fed continued to buy treasuries and mortgage-backed securities through its quantitative easing policies (QE 1-3).
A record number of junior companies attended the Precious Metals Summit. We are finding companies with attractive development projects in North America and West Africa as well as some exciting discoveries that merit watching.
Gold stock indices also traded near their highs for the year, but then followed the gold price lower. During September the NYSE Arca Gold Miners Index (GDMNTR) retreated 6.5%.
The momentum gold experienced in August carried over into early September. Geopolitical tension continued as South Korea reacted to possible preparation by North Korea for an intercontinental ballistic missile launch.
The healthcare sector has been the most challenged sector since the presidential elections in November 2016.
Moat company Polaris Industries (PII) has been doing well this year, returning ~30.0% year-to-date as of October 23, 2017.
SINA (SINA), a China-based online media company, benefited the International Moat Index the most in September.
The US Moat Index has been performing fairly well this year. As of September 30, 2017, it has outperformed, rising 20.5% over the S&P 500 Index’s (SPY) (SPX-INDEX) rise of 18.6% YTD.