|Asset Group||Asset Sub-Group||Investment Category|
|Fixed income||Sterling bonds||Core|
Why we recommend it
Manager 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.
ii 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.
Ethical 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.|
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.
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 40 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 40 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 40 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 40 investments list.