Millennials show increasing interest in impact municipal bonds

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Millennials have an appetite for a slice of the municipal bond market when it comes to investments in affordable housing, education or sustainable energy.

The size of the global “impact investing” market doubled in the past year, from $114 billion to $228 billion in assets, according to a 2018 annual survey by the Global Impact Investing Network and a younger generation is becoming more interested.

This growth is being in driven in part by a generation of millennials who are twice as likely as older investors to make investments targeting social or environmental goals, according to a 2017 JPMorgan study.

As of 2018, 77% of millennials have portfolios that include impact investments.

In the US, the New York State Housing Finance Agency, or HFA issues bonds and offers financing for both for-profit and not-for-profit developers looking to build and maintain affordable housing. In a December deal, the agency had a record amount of retail investor participation.

Instead of buying general obligation bonds, where the exact uses of the money aren’t always clear, younger investors look for other programs like the ‘No Place Like Home’ program in California that use municipal bonds to finance a program to address homelessness.

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