Insights

MySustainableCorner gives you monthly news on the sustainable bond market.  In 2023, sustainable bonds are still appealling, supported by investors ’and issuers’ CSR policies. Find a mid-year recap on green bonds, social bonds, sustainability bonds and sustainability-linked bonds, as well as regulatory information.

Focus on the credit market, with Philippe Berthelot, Head of Credit & Money market Since October 2022, we forecasted that 2023 would be an annus mirabilis for fixed income. And as a specialised fixed income asset manager, we were right! So far, 2023 is a marvelous year in general, and for credit in particular.

June was marked by outperformance of ‘high yield’ EM countries and in particular the ‘C’ rated segment compared to investment grade counterparts, as shown in the chart below.

Each month we share the conclusions from the monthly strategy investment committee which provides a summary of Ostrum’s views on the economy, strategy and markets. 

The year 2023 marks the 30th anniversary of the entry into force of the Convention on Biological Diversity. And yet, while major global forums – COP 15 in Montreal in December, the International Seabed Authority Council in Kingston and the One Forest Summit in Libreville in March – have punctuated the news in recent months, a detailed understanding of biodiversity issues is still limited to a college of experts. The climate threat has long dominated political, economic and media debates, with many believing that the fight against climate change automatically goes hand in hand with the preservation of life. Yet while the consequences of biodiversity loss may seem less glaring than climate catastrophes, their scale is enough to make you break out in a cold sweat: we're on the verge of a sixth mass extinction, with species disappearing at a rate 100 to 1,000 times higher than the natural rate; almost 75% of terrestrial environments and 40% of marine ecosystems are reportedly already degraded. 

The rate movement since mid-2022, both highly anticipated and surprising in its magnitude, has upset some investment paradigms anchored for several decades. The new IFRS accounting rules also change the classification of assets for a large number of insurers. The year 2023 therefore offers the opportunity to review the structure of the portfolios and to implement a more active management, in order to take full advantage of the new market conditions, while integrating accounting concerns, explains Rémi Lamaud, Expert Solutions, Insurance Management and ALM solutions department at Ostrum AM.

Each month we share the conclusions from the monthly strategy investment committee which provides a summary of Ostrum’s views on the economy, strategy and markets. 

Each month we share the conclusions from the monthly strategy investment committee which provides a summary of Ostrum’s views on the economy, strategy and markets. 

The volatility risk premium represents the premium investors are ready to pay to get protection against large market movements. Our Volatility Risk Premium Strategy is based on a quantitative model and is designed as an income product. It focuses on selling equity volatility and targets a beta lower than Equities without the structural duration risk that most income products onboard. 2022 gave us the opportunity to show that our strategy was more resilient than most income strategies in the rising interest rates environment thanks to its duration-free characteristic. With now over 5 years of live track-record, our strategy delivered robust risk adjusted returns and a Sharpe ratio above 0.6 over the period. It proves to be diversifying as a long-term strategic investment in an allocation. Main risks of the strategy: capital loss risk, volatility-linked risk, risk related to the underlying asset, model-based risk.

Ostrum AM’s one-stop shop adds value to institutional investors’ pre-trade, trading and post-trade activities

Credit Suisse suffered repeated scandals and governance failures which resulted in a weaker business profile. They struggled for years to get the right management team during which time we saw the franchise weaken.

Investors, whether institutional, banks or retail, are all looking for investments in line with their convictions, especially in terms of environment. Beyond the climate concern, they seek to participate in changes according to a Just Transition, which is socially responsible. These ambitions support the sustainable bond market, with the search for impact solutions, both from issuers – including governments – and from investors.