Even after more than three years of Republican-led attacks against
"Focusing on ESG as part of your investment framework can genuinely help you deliver better investment results," said Tom Moulds, senior portfolio manager for investment-grade fixed income at RBC BlueBay, which oversees almost $535 billion.
ESG funds have had "fairly decent" performance, compared with traditional funds, said London-based Moulds, adding that sustainable assets are less volatile. While the BlueBay Impact-Aligned Bond Fund has underperformed this year, it's done better than global investment-grade debt since being launched in 2021, data compiled by Bloomberg show.
On average, ESG strategies have done well for fixed-income investors this year, with the Bloomberg Global Aggregate Green Social Sustainability Bond Index jumping more than 10%. That compares with a 7% gain for the benchmark global aggregate index.
"Striking that balance between returns and outcomes-oriented impact investing is really key," Moulds said on the latest Bloomberg Intelligence Credit Edge podcast.
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The offshore wind industry has been a specific target in recent days, with a flurry of actions taken by the U.S. government to stymie development. In the latest move, the Trump administration intends to block the development of a large wind farm off the coast of Massachusetts.
"There's been some pretty radical moves by Trump and U.S. policy," Moulds said. "It's had a big impact on European issuers that focus on renewable energy. I would like to think that this is a relatively temporary phenomenon."
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Longer term, Moulds expects the need for cheap fuel to revive interest in renewable energy. In that context, investors should focus on companies that can deliver consistent and reasonably-priced green power.
"It's never been more important than now when you see the magnitude of energy that's required to power all these AI chips and cloud computing," Moulds said.
