Rathbone Ethical Bond Fund
Definition of product
- Focus on high quality (investment grade) bonds
- Highly skilled and experienced investment and ethical research team
- Higher income, aiming at 5-6% gross interest yield
- Quarterly payout of income
Fund objective
The aim of this fund is to provide a regular and above average income, by investing in a range of corporate bonds that meet strict criteria, both ethically and financially. The fund qualifies for inclusion in Individual Savings Accounts (ISAs).
Investment style
We are focused on the direction of government bond yields and credit quality trends. The gilt market is split into three distinct parts: short, medium and longer-dated bonds. Shorter bonds tend to be influenced by what we expect to happen to interest rates, medium-dated by what might happen to inflation and longer-dated by demand. We consider each of these in terms of better or worse economic conditions in order to arrive at a list of bonds that we believe will perform well in the medium term.
Having applied these traditional techniques, we then approach the ethical team in order that they may perform a second increasingly important and revealing level of testing using their own research techniques.
We invest in companies with first-class management, and which are bondholder-conscious.
Each individual bond issuer is then examined using the 'four C's' approach:
Character (an assessment of the quality of a company's management and its ability to meet expectations in the long term); Capacity (the ability of an issuer to repay debts); Collateral (the quality of the assets that form the basis of any company; Covenants (the terms and conditions laid down in bond prospects that govern the way the management may operate the business.
Why invest?
- Strong, defensive and income yielding.
- Manager has the backing of Rathbone Greenbank Investments, a dedicated research team that has been at the forefront of ethical investment since 1992.
The European SRI Transparency logo signifies that Rathbone Unit Trust Management Limited commits to provide accurate, adequate and timely information to enable stakeholders, in particular consumers, to understand the Socially Responsible Investment (SRI) policies and practices relating to the fund. Detailed information about the European SRI Transparency Guidelines can be found on www.eurosif.org, and information of the SRI policies and practices of the Rathbone Ethical Bond Fund can be found at: www.rutm.com. The Transparency Guidelines are managed by Eurosif, an independent organisation. The European SRI Transparency Logo reflects the fund manager’s commitment as detailed above and should not be taken as an endorsement of any particular company, organisation or individual.
Available for lump sum investment or regular savings into an ISA or as an unwrapped unit trust lump sum or savings plan. Charges are 4.0% initial charge and 1.25% per annum annual management charge.
"Investors in our funds will be treated as 'retail clients' for the purpose of dealing in units either when buying units from us or selling them back to us. You will enjoy all the protections provided to retail clients by the regulations."
The value of investments and the income from them may go down as well as up and you may not get back your original investment. Past performance should not be seen as an indication of future performance. The Manager’s annual fee is taken from capital.