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Green Fixed Income + ESG Equities > Green bonds > Flashcards

Green bonds Flashcards

1
Q

Name 5 examples of green bond projects

A
  1. renewable wind energy
  2. Pollution reduction
  3. water management
  4. clean transportation
  5. Renewable energy
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2
Q

what are some of the things referenced within the green bond principles

A
  • use of proceeds
  • process for project evaluation
  • management of proceeds
  • reporting of proceeds
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3
Q

What is the climate bond initiative

A

A standard that provides users with the opportunity to get their bonds certified.

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4
Q

what was green bond issuance in 2020 ?

A

over 301 bn USD

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5
Q

Which are the largest sectors in the green bond space ?

A

government and financials

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6
Q

what are the 3,4,5th represented sectors in green bonds

A

energy sector, property companies and sovereigns

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7
Q

After Euro, what is the next 3 most represented currencies of issuance?

A

USD AT 25%, SEK at 12%, cny AT 5%

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8
Q

What does an active approach in green bonds allow for ?

A

Security selection, sector allocation and duration management

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9
Q

What happens to income in the green bond etc?

A

accumulated

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10
Q

what % must be labelled green bonds?

A

70%

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11
Q

what % of securitised bonds can be used ?

A

30%

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12
Q

What is a climate aligned bond?

A

one that shows:
a core business that supports transition to low carbon future, an appropriate governance structure, a good operational environmental system

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13
Q

why have non labelled?

A

under researched
demand lower
market less exploited

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14
Q

what are the four steps in the research process for green bonds.

A
  1. top down macro views + bottom up research
  2. carbon impact assessment (green bond assessment)
  3. portfolio construction
  4. monitoring and risk management
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15
Q

what benchmark does the green bond etc track?

A

bloomberg Barclays mdci green bond index

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16
Q

what is the £ and Euro ticker?

A

FVUG + FLRG

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17
Q

what are some forms of social factors we take into consideration at ft?

A

cdiversity and inclusion
talent management
charitable giving
employee volunteering

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18
Q

What are some forms of governance we consider at FT in investing?

A

compliance?
code of ethics conduct
anti money laundering
enterprise risk management

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19
Q

what are the two types of asg in

A

negative screening investing vs risk based investing

20
Q

what % do we give to e.s..g in our sovereign approach?

A

35% environment 25% social 40% governance

21
Q

what was out 1 year performance 2020 vs benchmark

A

5.50% vs 4.82%

22
Q

as od dec 2020 what was our since inception performance vs benchmark

A

8.92% vs 8.41%

23
Q

who issued the first green bond and in what year?

A

world bank , 2008

24
Q

how much did Germany raise in 2020 with its 10yr son green bond

A

6.5bn euros

25
Q

what year issues is German expected to launch in green bond space?

A

2,5 and 20 yr.

26
Q

why is twinning important ?

A

Twinning a green bond with a sovereign means that investors will be able to see the premium of green bond vs yield.

27
Q

how much of the bus seven year budget is earmarked for green initiatives?

A

1trn euros

28
Q

what % of the covid rescue fund in Europe was earmarked for initiatives fitting climate change and carbon neutrality.

A

1/3

29
Q

What is the green bond yield in Dec 2020 vs benchmark ?

A

0.41% vs 0.14%

30
Q

as per dec 2020 what helped our performance in green bonds?

A

eurozone corporate ig financial bonds and sector allocation. Allocation to eurozone ig financial bonds.

31
Q

2020 YTD Changes? what were they?

A

Added basic materials, consumer and communication sector and insurance companies and REITS.

32
Q

What happened to industrial sectors in 2020

A

More than doubled from 4.5% to over 11%

33
Q

what happened to duration?

A

Increased by 1 year from 8.25 to 9.3 years.

34
Q

What could be a negative effect for 2021 ?

A

Broad disinflationary effects

35
Q

which new automobiles issued green bonds?

A

Volkswagen, daimler and volver

36
Q

which sectors dominated new issuances in 2020 ?

A

Financials and utilities

37
Q

What did BBVA do in 2020 ?

A

Issues first green convertible bond

38
Q

what ratings did we see on the increase in 2020 ?

A

BBB and below corporate bonds

39
Q

did corporate green bond issuence go up or down in 2020

A

down

40
Q

did government green bond issuance go up or down in 2020

A

up

41
Q

which 3 countries will be issuing new bonds in 2021

A

spoon, Italy and uk

42
Q

what changes went into effect in January 1st

A

ECB will be accepting bonds linked with coupons linked to sustainability performance targets as collateral and will be eligible for the asset purchases under both the APP and PEPP provided they meet other requirements.

43
Q

Green bonds, did duration and yield positioning help or hurt?

A

helped - 4bps.

44
Q

Did sector allocation help > if so how?

A

helped 12bps - overweight to eurozone corporate ing financial bonds

45
Q

did portfolio security selection help?

A

helped - 16bps - eurozone corporate ig financial bonds

Green Fixed Income + ESG Equities (4 decks)

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