Portfolio analysis

Transition review: March 2026 volatility and oil shock

Written by Kamesh Korangi

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March 2026 combined an oil shock, geopolitical escalation, and rising rate expectations into a simultaneous repricing of credit, rates, and currencies. Drawing on Co₂liseum model portfolio analytics, this review examines the implications for transition-focused investors.

GSS issuance fell 75% in EUR even as overall volumes rose 48%, as funding urgency overrode sustainability labels. Energy outperformed sharply — European energy bonds widened just 4% against a broader 13% — a headwind for transition portfolios typically underweight the sector.

Financials underperformed, and transition scoring inadvertently concentrates exposure there. Green bonds widened more than non-green equivalents: labels do not provide uniform protection. Deeper issuer-level transition analysis outperformed simple label-based screening.

About the author

Kamesh Korangi

Kamesh Korangi

Managing Director, Head of Portfolio Strategy

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.

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