|Asset Group||Asset Sub-Group||Investment Category|
|Fixed Income||Sterling bonds||Adventurous|
Why we recommend it
The fund has been managed by Bryn Jones since November 2004 who also serves as Rathbone’s head of fixed income. The wider investment team comprises deputy manager Stuart Chilvers and three credit analysts.
The fund invests in a minimum of 80% sterling investment grade bonds and up to 10% in non-rated bonds. The fund’s ethical overlay is provided by Rathbone Greenbank Investments, the specialist ethical investment unit of Rathbone Investment Management.
The process begins with identifying themes such as macro, sectors, new issuance, regulation etc. Credit analysis is then conducted where the team assesses the company’s character, ability to repay its obligations, its collateral and the covenants attached to the bond. From here the manager looks to identify bonds which look attractive on a relative valuation basis but will also look opportunistically at bonds which appear too cheap on an absolute basis.
Companies issuing these identified bonds will have to pass the ethical team’s negative screening tests and have approval by a member of the fund’s ethical committee, before being considered for inclusion in the fund universe.
The fund has 100-200 holdings, but the majority of the portfolio has been held in bank and insurance bonds over the past five years owing to much improved fundamentals and opportunities due to liability management exercises.
The fund has comfortably outperformed both peers and the Markit iBoxx GBP Non-Gilt Index over the long term on an absolute and risk adjusted basis.
Although the fund has less analytical resource than peers, it benefits from a long tenured and experienced manager in Bryn Jones who has successfully implemented the process over time and provides a key positive for this product.
Investors should be aware of the significant bias towards bonds from financial companies which is a source of additional risk.
The fund is reasonably priced: The ‘I’ income share class levies annual ongoing charges of 0.66%.
ii ACE sustainable style: Considers. This means the fund carefully considers an often wide range of ethical and/ or environmental, social and governance (ESG) issues or themes when balancing positive and negative factors.
Fund EcoMarket category: Ethical. Ethical Funds consider 'values based' issues like tobacco, gambling and armaments, typically alongside a wide range of environmental and social issues Some funds have strict screening criteria and avoid a significant nuber of companies. Others invest in most sectors, focusing on companies with the highest standards. Strategies vary.
How the fund is managed: The manager runs the fund with a strongly defined view that accounts for economic and political trends, company analysis, and thematic ideas. An ethical overlay is applied which consists of a negative screening followed by a positive screening.
|Information and data compiled March 2023.|
The information we provide in the ACE investments list does not constitute a "personal recommendation". You should ensure that any investment decisions you make are suitable for your personal circumstances and that the ethical style of the investment reflects your personal beliefs.
Past performance of the underlying constituents is not a guarantee of future performance. Remember, the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest.
Annual performance can be found on the factsheet of each fund, trust or ETF. Simply click on the asset’s name and then the performance tab.
If you are unsure about the suitability of a particular investment or think that you need a personal recommendation, you should speak to a suitably qualified financial advisor.
Any changes to the ii ACE investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Outlook.
Details of all recommendations issued by ii during the previous 12 month period can be found here.
ii adheres to a strict code of conduct. Members of ii staff may hold shares in companies mentioned in the ii ACE investments list, which could create a conflict of interest. Any member of staff intending to complete some research about any financial instrument in which they have an interest are required to disclose such interest to ii. We will at all times consider whether such interest impairs the objectivity of the recommendation.
In addition, staff involved in the production of this ii ACE list are subject to a personal account dealing restriction. This prevents them from placing a transaction in the specified instrument(s) for five working days before and after an investment is included or amended and made public within the list. This is to avoid personal interests conflicting with the interests of the recipients of this ii ACE investments list.