fund

Rated

This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!

Rathbone Ethical Bond I

Diverse portfolio of sterling denominated bonds meeting strict ethical criteria.

  • 105.23p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 247.84p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.63%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.67%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 3.10%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 29 July 2021, fund data last updated 20 April 2018

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.

Fund summary

Sector £ Corporate Bond
Structure UNIT TRUST
Launched March, 2012
Size £2,359m
Yield 3.10%
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 0.67%

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Investment process

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.

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.

Manager research

Average monthly relative returns

  • 16/17 0.19%
  • 17/18 0.15%
  • 18/19 -0.15%
  • 19/20 0.00%
  • 20/21 0.12%

Bestinvest MRI

  • 3 years -0.01%
  • 5 years 0.06%
  • Career -0.02%
  • 3 years 79.40%
  • 5 years 99.70%
  • Career 86.00%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Bryn Jones

Bryn Jones joined Rathbones in November 2004, having previously been Portfolio Manager (Assistant Vice President) - Fixed Income at Merrill Lynch. He has also worked at Robert Fleming Investment Management, Coutts & Co and Schroders. He has a BA in Geography and holds the IMC.

Track record

Bryn Jones has 9.6 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 -7.00% (January 2020 - March 2020)
Relative -8.00% (December 2011 - January 2015)

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.

Allocation

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Top 10 holdings

Data accurate as at 31 July 2020

2.12% Lloyds 13.0% Perp
2.02% Hsbc Bank Plc 5.844% Fltg Rte Sub Nts 11/48 Gbp10m
1.97% Aviva 6.875% 20/05/2038
1.83% Scottish Widows 7.0% 16/06/2043
1.8% Legal & General 3.75% 26/11/2029
1.72% M&G Plc 5.625% 20/10/2031
1.69% Legal & General 5.5% 27/06/2044
1.66% Axa 5.625% 16/01/2034
1.63% Royal London 6.125% 13/11/2028
1.54% Royal London 4.875% 07/04/2039
Source: Trustnet

Sector breakdown

Insurance 39.00%
Banks 35.00%
Property 7.00%
Financial Services 4.00%
Alternative & Renewable Energy 3.00%
Cash & Cash Equivalents 3.00%
Infrastructure 2.00%
Fixed Interest 2.00%
Telecommunications 2.00%
Real Estate 1.00%

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.

Key Investor Information - Income

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Key Investor Information - Accumulation

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