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November 2022 / INVESTMENT INSIGHTS

Impact Investing in Credit: Debunking Four Common Misconceptions

We attempt to debunk four popular myths about impact investing

Increasingly, companies are being measured not only by their earnings and cash flow, but according to the effect their activities have on the environment and society. As a result, credit investors no longer judge those companies solely on their risk and return characteristics, but increasingly by their external impact as well. 

So-called impact investing is not a new asset class: it is a natural extension of environmental-, social-and governance- focused (‘ESG’) investment approaches in credit. The idea is to identify debt issuers on the right side of change— those that are seeking to deliver a beneficial environmental and social impact, as well as positive financial returns.

Fixed Income Impact portfolios can be flexibly managed to client objectives.

- Matt Lawton, Portfolio Manager, Fixed Income

Impact investing has grown considerably in the past few years. But a lack of knowledge and several commonly shared misconceptions may discourage investors from considering this way of investing in credit.

In this article, we attempt to debunk four popular myths about impact investing, as well as showing how T. Rowe Price’s Global Impact Credit Strategy addresses them.

Read the full article (PDF)
 

IMPORTANT INFORMATION

This material is being furnished for general informational and/or marketing purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, nor is it intended to serve as the primary basis for an investment decision. Prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

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Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request.  

It is not intended for distribution to retail investors in any jurisdiction.

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