| Asset Group | Asset Sub-Group | Investment Category |
| Fixed income | Sterling bonds | Core |
Why we recommend itManager Eric Holt has been at the helm since June 2009. Holt joined Royal London in 1999 and has more than 40years’ experience in the fixed-income market. The sterling credit portfolio management team consists of six members, who are part of the 30-strong fixed-income team at Royal London. All bonds selected for the portfolio have passed an ethical screening process that filters out companies with significant involvement in areas such as armaments, gambling, and pornography, as well as companies with inappropriate or inadequate policies or systems in environmental, human rights, and animal testing areas. The investment process starts with a review of the macro environment to identify the most-attractive credit markets. This is followed by in-depth bottom-up credit research, with a heavy emphasis on bond covenants and structure. The approach has led to a bias toward secured bonds (within sectors such as covered bonds, investment trusts, real estate, social housing, and structured). The fund manager also tends to invest in unrated bonds. Duration is not expected to be a return driver but has deviated by up to plus or minus 1.0 year from the Markit iBoxx GBP Non-Gilts Index. Performance over manager Eric Holt’s tenure has been strong, ahead of the Markit iBoxx GBP Non-Gilts Index and peers to December 2022, which shows that the ethical exclusions have not caused the strategy to miss out. The fund benefits from an experienced manager and a detailed credit research process. It is also positive that outperformance has been consistent over a range of different time periods and market environments. Ethical criteriaii ACE sustainable style: Avoids. This means the fund simply screens out specific sectors considered to be unethical, or stocks whose environmental, social and governance (ESG) scores are below a certain threshold. 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. The risksEthical screening: In certain market conditions, the performance of the fund may differ significantly from others in the peer group that do not exclude specific sectors or companies from a comparable investment universe. | ||
| Information and data compiled to March 2023. | ||
Risk warnings
The information we provide in the ACE 40 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.
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