- Yield History3.32%
- 3 Year sharpe0.88
- 3 Year alpha0.72
- Distribution Typeaccumulation
- BenchmarkIA Sterling Corporate Bond
- Legal StructureUnit Trust
- Fund Size (month end)Unit Trust
- IA Sector£ Corporate Bond
- Manager GroupRathbone
- DomicileUnited Kingdom
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.