Chapter 7

Financial markets: bonds

Abstract

While environmental, social, and governance (ESG) bonds don’t receive as much attention as equities, there are several ESG alternatives for fixed income investors. In this chapter, the basic theory underlying interest rates is presented. Debt instruments, concepts, and markets are described. ESG bond funds contain obligations of companies that score high on ESG factors. Green bonds are securities issued for specific projects which are designed to achieve environmental goals. Green bond funds invest in groups of these bonds. Green bond ETFs are ETFs tied to the broad-based green bond indexes.

Keywords

Green bond; ESG bond fund; green bond ETF; green bond index; GRNB; BGRN; PIMCO; Fidelity

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