Rathbone Ethical Bond I Acc

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Trading AccountISAJISASIPP

Fund Info

  • Yield History3.41%
  • 3 Year sharpe0.84
  • 3 Year alpha1.65
  • Distribution Typeaccumulation
  • BenchmarkIA Sterling Corporate Bond
  • Legal StructureUnit Trust
  • Fund Size (month end)Unit Trust
  • OCF0.66%
  • IA Sector£ Corporate Bond
  • Manager GroupRathbone
  • DomicileUnited Kingdom
  • ISINGB00B77DQT14

Investment Strategy

The objective of the fund is to deliver a greater total return than the IA Sterling Corporate Bond sector, after fees, over any rolling five-year period. To meet the objective, the fund manager will invest at least 80% of our fund in corporate bonds with an investment-grade rating (AAA to BBB-). The remaining 20% of the fund is invested in corporate bonds with a credit rating below BBB- or with no rating at all. Up to 10% of the fund can be invested directly in contingent convertible bonds.

ii Super 60 selected

This Fund is a member of our ii Super 60 rated list

Rathbone Ethical Bond has a higher income target than most of its peers and currently yields 3.6%. Income is paid quarterly. Bryn Jones has run this fund since 2004 and was joined by assistant manager Noelle Cazalis in 2016. They invest predominantly in investment-grade bonds. They use an approach that considers economic and political trends, company analysis and thematic ideas. Once investment themes have been developed, Jones and his team look for the best bonds to buy within that framework.

When assessing which companies’ bonds to buy, the managers use the ‘four Cs plus’ process to help make their selections. These are: character (management’s ability to react to events); capacity (sources of liquidity and cash-flow analysis); collateral (assets that are pledged); and covenants. The ‘plus’ is conviction: Jones believes that in order to achieve long-term, above-average performance, he must think differently from the market.

Rathbone Greenbank, the company’s ethical investment unit, then applies an ethical screen. Exclusions are simple: no mining, arms, gambling, pornography, animal testing, nuclear power, alcohol or tobacco, which rules out about one third of their universe. All positions must also have at least one positive environmental, social or corporate governance quality. Jones welcomes this ethical overlay, regarding it as an extra level of investment diligence.

September 2020

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