Rathbone Ethical Bond Fund Institutional Acc
Rated Fund 2013-19. A competitive yield from ethical investment-grade bonds
Rathbone Ethical Bond ranks highly among corporate bond funds and deserves to retain its place. The fund was named Money Observer’s Best Ethical/SRI Bond Fund in 2015, 2016 and 2017. It has a higher income target than most of its peers and currently yields 4.4%. Bryn Jones has run this fund since 2004. He was joined by assistant manager Noelle Cazalis in 2016. They mostly invest in investment-grade bonds using an approach that takes into account economic and political trends, company analysis and thematic ideas. Jones and his team look for the best bonds to buy within the thematic framework.
When assessing which companies’ bonds to buy, the managers use the ‘four Cs plus’ process to help them make selections. These are: character (management’s ability to react to events), capacity (sources of liquidity and cash-flow analysis), collateral (assets that are pledged), and covenants. The ‘plus’ is conviction: Jones believes that in order to achieve long-term, above-average performance, he must think differently from the market.
Rathbone Greenbank, the company’s ethical investment unit, then applies an ethical screen. All positions also have at least one positive environmental, social or corporate governance quality. Jones welcomes this ethical overlay, regarding it as an extra level of investment diligence.
FundCalibre, the fund ratings and research provider, rates this an ‘Elite’ fund. “It has managed to outperform regardless of its ethical constraints, illustrating that income and ethics can be combined without sacrifice,” says managing director Darius McDermott.
Narrative and ratings content all as of 01 January 2019.See all Money Observer rated funds
|RL Finance Bonds No. 3 plc 6.12%||2.04 %|
|HSBC Capital Funding (Sterling 1) L.P. 5.84%||2.00 %|
|BPCE SA 5.25%||1.93 %|
|Cooperatieve Rabobank U.A. 6.91%||1.92 %|
|AXA 5.45%||1.91 %|
|Lloyds Bank plc 13%||1.86 %|
|HBOS Sterling Finance (Jersey) 7.88%||1.78 %|
|RSA Insurance Group Plc 5.12%||1.74 %|
|Aviva Plc 6.12%||1.69 %|
|Rothschilds & Co Continuation Finance CI Ltd 9%||1.61 %|
|United Kingdom||100.00 %|
|Financial Services||100.00 %|
Bryn joined Rathbones in November 2004. He is co-manager of the Rathbone Ethical Bond Fund. Prior to joining Rathbones, he was Portfolio Manager (Assistant Vice President) – Fixed Income at Merrill Lynch Investment Managers. He has over 10 years investment industry experience in equity and fixed income markets and has a BA Honours in Geography. Bryn holds the Investment Management Certificate. He holds the IAQ Merit Award and the IAQ Introduction to Securities and Investments examination. As a footballer, he has represented London Banks against the Marines in the Southern Amateur League, and has played hockey in National Division two.
Data provided by Morningstar.
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