Rathbone SICAV Ethical Bond Fund

WHY INVEST IN THE ETHICAL BOND FUND?

• One of the UK’s oldest ethically managed bond strategies, run by Bryn Jones since 2004
• Greenbank, an ethical, sustainable and impact research division of Rathbones that can’t be influenced by our fund managers, has a veto on holdings, minimising the risk of greenwashing  
• A portfolio of higher-yielding investment grade UK bonds offers a compromise of risk and return that doesn’t compromise on its values
• Identifying big, long-term themes about new technologies, consumer trends or changes to the economic environment and investing accordingly 

FUND OVERVIEW

We predominantly buy sterling bonds issued by companies, charities, the UK government and non-governmental organisations. The objective of our fund is to deliver a greater total return than the IA Sterling Corporate Bond sector, after fees, over any rolling five-year period. There is no guarantee that this investment objective will be achieved over five years, or any other time period. We use the IA sector as a target for our fund's return because we aim to consistently outperform the average return of our competitors. You can find our fund’s full objective and investment policy in our Key Investor Information Document (KIID), here.

At the same time, we avoid investing in activities that make the planet or its inhabitants worse off, and actively support those projects that are doing good in the world. You can read our ethical screening criteria in depth here.

Greenbank, an ethical, sustainable and impact research division of Rathbones that can’t be influenced by our fund managers, assesses all our investments on these positive and negative social and environmental criteria. Greenbank has a veto over all our investments to ensure profits never override sustainability. Our fund managers then compare prices to determine the best value bonds to include in our fund. You can view our latest case studies document here.

When picking UK corporate bonds, we make three assessments. First, we look at the economic environment to determine which industries we want to own and the duration, or sensitivity to interest rates, of our investments. Then we use the Four Cs Plus approach to evaluate creditworthiness.

We assess:  

• Character: Whether a company's managers have integrity and competence
• Capacity: Ensuring a company isn't over-borrowing and has the cash to pay its debts
• Collateral: Are there assets backing the loan, which reduces the risk of a loan?
• Covenants: These loan agreements set out the terms of the bond and restrictions on the company
• The Plus: We think differently to the market; sometimes contrarian, sometimes sceptical of orthodox thinking, but always opinionated

These twin processes of investment and ethics mean all our investments have a sound investment case and a solid sustainability record.