(Bloomberg) -- Bonds to pay for green and social projects have outperformed normal notes this year, and that will likely continue unless the global economic recovery is V-shaped, according to Emso Asset Management, which oversees $5.5 billion in assets.

In the U.S. market, green bonds have returned 8.4% so far in 2020, compared with a 7.3% gain for American corporate notes overall, according to Bloomberg Barclays indexes.

That’s primarily because environmental, social and governance bonds had less exposure to oil exporting countries, while non-ESG issuers took a double hit from the coronavirus pandemic and the oil price war between Russia and Saudi Arabia, said Jens Nystedt, a New York-based senior portfolio manager at Emso Asset.

“Looking ahead, we expect that the ability for ESG benchmarks to outperform will be driven by the economic recovery,” Nystedt said in an e-mail interview. “In a V-shaped scenario, we would expect non-ESG to outperform given the bigger commodity concentration and lower credit quality, but in any risk-off ESG should prove to do better again.”

Global issuers are selling sustainable notes at the fastest pace ever this year, with deals increasing 29% to $195 billion according to Bloomberg-compiled data, as a boom in notes to pay for the battle against the pandemic meets rising investor demand for ESG assets. Sales of corporate bonds in general have climbed at an unprecedented speed in 2020 as policy makers flood the market with cash and investors hunt for extra yield.

Federal Reserve policy makers said the public health crisis would weigh heavily on economic activity, employment and inflation in the near term, and was posing considerable risks to the economic outlook over the medium term, according to minutes from their July 28-29 meeting released on Wednesday. And the World Trade Organization said this week that projections for a strong, V-shaped trade recovery in 2021 may prove “overly optimistic.”

(Updates return figures in second paragraph and adds chart)

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