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Ameriprise Blasts Overpriced Green Bonds, Prefers Oil Drillers

  • Overpaying undermines return, says senior director Cartwright
  • Oil companies moving to renewable energy are better investment
General Views Of Minneapolis
Photographer: Ariana Lindquist

Bonds that fund environmental projects are overpriced, and money managers are better off investing in debt from companies like oil drillers that are trying to become more sustainable, said Jon Cartwright, senior director of fixed income at Ameriprise Financial.

Demand for green bonds -- the largest category of sustainable debt by amount issued -- is so strong that investors end up paying relatively high prices to own the bonds, effectively suppressing the yield. Those higher prices leave little potential for gains beyond the interest payments, said Cartwright. Ameriprise Financial oversaw $1.3 trillion as of April 25, 2022.