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RATHBONE ETHICAL BOND I

RATHBONE ETHICAL BOND I - Overview

Overview of RATHBONE ETHICAL BOND I

The objective of the fund is to provide a regular, above average income by investing in a range of sterling-dominated bonds that meet Rathbone's ethical and financial criteria. The portfolio primarily consists of investment grade corporates, but some high yield and unrated bonds are also included. The team apply both negative and positive screening to all investments considered for the portfolio. The fund will avoid issuers involved in armaments, environmentally unsustainable activities, animal testing, tobacco, nuclear power, alcohol, pornography, gambling and predatory lending.

  • Standard Initial Charge 0.00%
  • Initial charge via Bestinvest 0.00%

Fund summary

Sector £ Corporate Bond
Structure UNIT TRUST
Launched March, 2012
Size £2,764m
Yield 3.4%
Charging basis Capital
Dividends paid 31 Mar, 30 Jun, 30 Sep, 31 Dec

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.63%
Ongoing charges figure 0.66%

Risks

Before investing make sure you have understood the risks relevant to the fund by reviewing our Risk Warnings section. Further information on the risks are contained in the fund's Key Investor Information Document, which we make available to you before you make a decision to invest, alternatively it is available on request.

Bestinvest view

The fund benefits from the lengthy experience of fund manager Bryn Jones who has been in charge for 18 years and fellow manager Noelle Cazalis. They rank amongst the best managers in the sector and are aided by a strong Credit Analyst and Ethical Research team. The investment process is very comprehensive and has helped the fund historically outperform its peer group and achieve both low volatility and a high yield. The fund remains sector-leading from an ESG perspective which fits well with current investment trends. This is a strong option for investors looking for exposure to bonds and aiming to beef up their sustainability portfolios.

Portfolio

Allocation Proportion(%)
Equity 1
High yield bonds 13
Quality bonds 82
Property 0
Commodities 0
Hedge 0
Fund cash 4
Allocation Proportion(%)
UK 100
Europe 0
North America 0
Japan 0
Pacific 0
Emerging Markets 0
Allocation Proportion(%)
Large Caps 100
Mid Caps 0
Small Caps 0

View all performance data for this fund

Investment process

In the first stage of the investment process the managers looks at the economic environment to determine which industries to own as well as the duration of its investments. The team then seeks to identify attractive opportunities in the investment grade corporate bond sector. To do this it uses its Four Cs Plus approach to evaluate creditworthiness. It assesses Character - whether a company’s managers have integrity and competence; Capacity – ensuring that a company isn’t over borrowing and has the cash to pay its debts; Collateral –whether there are assets backing the loan which reduces risk; and Covenants – loan agreements which set out the terms of the bond and restrictions in the company. The final C is called The Plus which according to Rathbones means: “We think differently to the market, sometimes contrarian, sometimes sceptical of orthodox thinking but always opinionated.” The bond issuers will also be assessed against a set of positive and negative social and environmental criteria. A company will fail the negative screen if it is involved in any of the following areas: armaments, environmentally unsustainable activities, animal testing, tobacco, nuclear power, alcohol, pornography, and gambling. But it must also show at least one positive aspect such as management of environmental impacts or human rights. The ESG research, is carried out by Rathbone Greenbank, the company’s ethical research division. Indeed, approval for investments must be given at a weekly meeting, by the whole ethical investment team.

Live feed

Bid price(inc) 101.15p
Accum units 247.28p
Fund commentary 20/04/18
Fund data updated on 09/12/21

Asset allocation

Allocation Proportion(%)
Equity 1
High yield bonds 13
Quality bonds 82
Property 0
Commodities 0
Hedge 0
Fund cash 4

Equity Geographic

Allocation Proportion(%)
UK 100
Europe 0
North America 0
Japan 0
Pacific 0
Emerging Markets 0

Equity Capitalisation

Allocation Propor
tion(%)
Large Caps 100
Mid Caps 0
Small Caps 0

Top 10 holdings

As at: 31/10/2021
2.75% Hsbc Bank Plc 5.844% Fltg Rte Sub Nts 11/48 Gbp10m
2.37% Lloyds Banking Group Plc 2.707% Dtd Sub Rst Nt 03/12/35 Gbp100000
1.89% Aviva 6.875%/ Frn 20/05/58 Gbp50000
1.86% Scottish Widows 7.0% 16/06/2043
1.81% Legal & General Group 5.5% Nts 27/06/64 Gbp100000
1.78% Stichting Ak Rabobank 19.4365% Perp
1.57% Bupa Finance Plc 4.125% Sub Nts 14/06/35 Gbp100000
1.42% Just Group 9.0% 26/10/2026
1.38% Lv= 6.5% 22/05/2043
1.32% Royal London 4.875% 07/10/2049
Source: Trustnet

Sector breakdown

Insurance 42%
Banks 34%
Property 6%
Financial Services 4%
Alternative & Renewable Energy 3%
Cash & Cash Equivalents 3%
Real Estate 2%
Telecommunications 2%
Infrastructure 1%
Financials 1%

Portfolio details

No information available.

Constraints

Negative and positive ethical screens. Min 80% sterling, but have never been close to that limit. No Gilts currently - will buy green bonds etc.
The portfolio usually has very little commonality with the benchmark and so performance can be expected to differ markedly on occasions.

Average monthly relative returns Bestinvest MRI
17/18 18/19 19/20 20/21 21/22   3 years 5 years Career 3 years 5 years Career
0.13% 0.09% -0.19% 0.13% 0.01%   -0.01% 0.04% -0.02% 77.00% 99.10% 87.10%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Bryn Jones

Manager. Jones joined Rathbones in 2004 and is the head of fixed income, He is a member of the Rathbone Strategic Asset Allocation Committee, non-executive chairman of Rathbones' Fixed Income Committee, and an adviser to the Rathbone Banking Committee. He was previously Portfolio Manager (Assistant Vice President) - Fixed Income at Merrill Lynch. He has also worked at Robert Fleming Investment Management, Coutts & Co and Schroders. He graduated from Birmingham University with a Bachelor of Arts degree in Geography in 1995.

Track record

Bryn Jones has 10.1 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.02%. During the worst period of relative performance (from December 2011 - January 2015) there was a decline of 8% relative to the index. The worst absolute loss has been 7%.

Periods of worst performance
Absolute -7% (January 2020 - March 2020)
Relative -8% (December 2011 - January 2015)

Other funds managed

  Start Date
RATHBONE ETHICAL BOND RNov 2004

Sector record since December 2011 (10 yrs)




About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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