This fund is benchmark agnostic and has been one of the best performing funds in the market in recent years. Fund manager Bryn Jones applies a "Four Cs Plus" process in determining credit selection - character (management), capacity (ability to repay), collateral (security) and covenants. The plus is the conviction that the team have in the underlying investments. The fund tends to have a lower duration than the benchmark, which is viewed as favourable in current market conditions.
Rathbone invests in a diverse portfolio of investment grade corporate bonds that pass the team's ethical screening process. The team identify attractive fixed interest opportunities before analysing the ethical position of a company. Approval for investment has to be given at a weekly meeting, by the whole ethical investment team. Research will be carried out on the issuers using various sources of information, including company visits.
The bond issuer will be assessed against a set of negative ethical specifications and if they qualify, will then have to demonstrate policies in at least one positive aspect. A company will not pass the negative screen if they are involved in any of the following areas; armaments, environmentally unsustainable activities, animal testing, tobacco, nuclear power, alcohol, pornography and gambling. It then must show to be having a positive effect in one of these areas; management of environmental impacts, human rights, provision of beneficial products/services, corporate community investment and employment opportunities.