Rathbone Ethical Bond fund

3 green plants in a circle

Strong Screening Process

The fund combines both positive and negative screening to focus on only the most suitable companies for the fund

green trophy in a circle

Lower Risk

Compared to peers the fund has lower volatility, meaning performance tends to fluctuate less, reducing risk

green globe in a circle

Income Play

For investors looking for income alongside ESG integration this fund currently offers around a 3.8% yield

green sign with an upwards arrow in a circle

Strong performance

Despite a rigorous ESG framework, the fund still manages to deliver top performance over 5 years in comparison to the sector

The Fund

The Rathbones Ethical bond fund is managed by Bryn Jones alongside Noelle Cazalis who, combined, have over 30 years’ experience investing in equity and fixed income markets. The aim of this fund is to provide a regular, above-average income through investing in a range of bonds and bond market instruments that meet strict ethical and financial criteria.

This fund defines ‘Environmental, Social & Governance’ (ESG) investing as an investment strategy that believes long-term growth can be achieved by companies that conduct their business and apply capital responsibly, giving full consideration to a range of ethical issues which may affect wider society.

Greenbank

This fund utilises their specialist ethical investment unit, Greenbank, who help deliver oversight into ethical decision-making. When screening for suitable investments, the fund excludes bonds issued by organisations that are involved in alcohol, armaments, gambling or tobacco. They also screen for positive elements such as environmental management, community investment and human rights compliance.

The portfolio likes to tilt towards companies that consider climate change and have carbon-light business models. This helps to reduce the structural challenges businesses will face in the future as we shift to a more sustainable economy. It is thought some of the structurally challenged companies such as fossil-fuel companies will start to suffer from carbon taxes and regulation, whereas new subsidies to promote low-carbon activates will help companies on the other side of this.

Example holdings

Slide to view more
Holding
What they do
Thrive Renewables Established in 1994 in response to the Chernobyl disaster, Thrive offer opportunities to invest in renewable energy projects that deliver financial, environmental and social rewards. The company owns more than 15 renewable energy projects across the UK. Although the majority of these projects are wind focused, the company is aiming to diversify in solar and hydro moving forward.
Orange One of the largest operators of mobile and internet services in Europe and Africa. They provide 266 million residential and business customers worldwide. The Group promotes socio-economic development, particularly in Africa, where it contributes to improving connectivity across the continent through the use of sustainable solar-powered and off-grid base stations
Orsted In 2017, the Group sold its remaining oil and gas exploration and production activities to reflect its transformation to a future producer of solely green energy. The company now focuses fully on renewable energy generation. The number of homes powered by projects financed by its green bond programme was estimated to have reached 11.7m in 2018.