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Rathbone Ethical Bond I

Bestinvest LogoDiverse portfolio of sterling denominated bonds meeting strict ethical criteria.

PRICE (INC)

89.16p

PRICE (ACC)

217.64p

INITIAL CHARGE

0%

ANNUAL MANAGEMENT CHARGE

0.63%

ONGOING CHARGE

0.66%

YIELD

4%

1 YEAR
-12.78%

Prices as at 16 Aug 2022.

Fund commentary last updated 17 Jan 2022.

Past performance is not an indication of future performance.

Capital at risk.

The fund aims to deliver a regular income by investing in a range of sterling-denominated bonds that meet Rathbone’s ethical, sustainable, and financial criteria. It also seeks to generate a greater total return than the Investment Association Sterling Corporate Bond sector over any rolling five-year period. Managers Bryn Jones and Noelle Cazalis mainly invest in investment grade corporate bonds, currently including banking giant HSBC, BUPA Finance, and insurance group Aviva, but also some high yield and unrated bonds. They make three key assessments when selecting their portfolio. This includes gauging the current economic environment as well as analysing targeted bonds against their Four Cs Plus criteria: managerial character, financial capacity, collateral, covenants, and conviction. The team also applies both negative and positive screening to all investments, avoiding issuers from sectors such as armaments and animal testing.

Fund summary

Sector£ Corporate Bond
StructureUNIT TRUST
LaunchedMarch 2012
Size£2,286m
Yield4%
Charging BasisCapital
Dividends paid31 Mar, 30 Jun, 30 Sep, 31 Dec

Charges

Standard Initial Charge0%
Initial Charge Via BestInvest0%
Additional Bid/Offer Spread0%
Annual Management Charge0.63%
Ongoing Charges Figure0.66%

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.

The information on this website is not intended to be advice or a recommendation to buy, sell or hold any investment mentioned. The value of investments and the income from them can go down as well as up and you may not get back the amount invested.

Past performance is not a guide to future performance. View full risk warning