There are two global green bond exchange traded funds (ETFs) that I track, the iShares Global Green Bond (BGRN) and the VanEck Vectors Green Bond (GRNB). Both have similar objectives of investing in the green bond marketplace.
The Rieger Report ranks them as follows:
#1) VanEck Vectors Green Bond ETF (GRNB): Rationale: GRNB has higher yields (both 30 Day SEC Yield and Yield to Maturity) and a shorter duration than the iShares ETF. GRNB includes below investment-grade bonds (26%) that qualify in the underlying index helping it to provide incremental yield for the portfolio while adding some credit risk.
#2) iShares Global Green Bond ETF (BRGN): Rationale: While this ETF has grown in assets faster than its competitor, it only includes investment-grade bonds that qualify in the underlying index this keeps the resulting yield low. The lower yield and longer duration of the ETF makes it less attractive in this environment. (Admittedly we are in a lower for longer environment, but duration risk is still present in some shape or form).
Green Bond ETF Rankings
Sources: iShares by BlackRock, VanEck. Table is shown for illustrative purposes only. Past performance is not indicative of future results. Data as of 10/21/2020 unless otherwise noted. (1) Quality data for GRNB as of 9/30/2020. (2) SEC Yield for BGRN is as of 10/20/2020.
J.R. Rieger and or the Rieger Report LLC has not received compensation either directly or indirectly from the sponsor(s) of the ETF(s) included in this report.
At the time of this writing, JR Rieger’s fixed income related holdings include investment grade individual municipal bonds, insured municipal bonds, a municipal bond money market fund and a position in the VanEck Vectors High-Yield Municipal Index ETF (HYD).
Past performance of any investment product or index referenced in the Rieger Report is not an indication of or guarantee of future results.
The Rieger Report LLC is not an investment advisor, and the Rieger Report LLC makes no representation regarding the advisability of investing in any such investment fund or other investment vehicle. A decision to invest in any such investment fund or other investment vehicle should not be made in reliance on any statements set forth in this document. Prospective investors are advised to make an investment in any such fund or other vehicle only after carefully considering the risks associated with investing in such funds, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other investment product or vehicle. A financial advisor should be contacted to determine what may be best for your individual needs. The Rieger Report LLC is not a financial or tax advisor. A tax advisor should be consulted to evaluate the impact of any tax-exempt securities on portfolios and the tax consequences of making any particular investment decision. No legal relationship is created between you and Rieger Report LLC.
The Rieger Report LLC does not act as a fiduciary or investment advisor. While the Rieger Report LLC has obtained information from sources it believes to be reliable, the Rieger Report LLC does not perform any audit or undertake verification of any information it receives.
The Rieger Report Rankings are opinions of relative ranking among the peer group analyzed as of the date expressed and not statements of facts. Rieger Report model portfolios are intended for illustration only. Any opinion or analysis decisions are not to be construed as recommendations to purchase, hold or sell any securities or to make any investment decisions, and do not address the suitability of any security. The Rieger Report LLC does not assume any obligation to update the content in this publication in any form or format.
Your use of any information from this document or presentation is at your own risk and without recourse against Rieger Report LLC, its members, managers, or employees. To the maximum extent permitted by law, Rieger Report LLC disclaims any and all liability in the event any information, commentary, analysis, and/or opinions prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.At the time of this writing, JR Rieger owns individual municipal bonds and a municipal bond fund. JR does not own bonds issued by Apple Inc.