On April 2, known as Liberation Day, President Trump announced the US administration's tariff policies. The market reaction that ensued was unprecedented. We examine and compare green bonds and traditional bonds’ volatility in the European and US investment grade corporate bond markets.
There is a prevailing market maxim that green bonds display less volatility than traditional bonds.
Following the strong market reaction to the US Government's tariff policies, we took the opportunity to test the theory.
While we found no conclusive evidence to support green bond preference due to indiscriminate selling in the market, there was lower volatility in the form of lower beta in Europe's green bonds.
Kamesh is an experienced credit derivatives and bond trader who leads the development of AFII’s portfolio analytics tool, Co₂liseum. He was previously a market maker and credit analyst at NatWest Markets, and holds a PhD in deep learning.
Based in Singapore, Rose has over 20 years’ experience in capital markets, most recently as a Senior PM at Conning Asia, and her research focuses on credit research and analysis on the energy transition in the Asia-Pacific region.
