- Expanding Coverage: FTSE Russell’s new indices now include high-yield and emerging market bonds, broadening their climate-aligned investment tools.
- Sector Adjustments: The new indices significantly underweight energy sectors while overweighting services and manufacturing, reflecting sustainability priorities.
- Performance Implications: Higher volatility and tracking differences are observed in sustainable high-yield and emerging market indices due to their unique sector compositions.
FTSE Russell Broadens Climate-Focused Bond Indices
FTSE Russell has expanded its Fixed Income EU Climate Benchmark index series to include high-yield securities and emerging markets, aligning these with the 2015 Paris Climate Agreement. Launched in June 2024, the phase 2 indices introduce a broader array of bonds to cater to the growing demand for climate-aligned fixed income investments.
Sector Rebalancing for…
