The investments are high quality bonds and the ethical screening doesn’t compromise returns. For investors looking for a well-run corporate bond this could be a good option for them.
There are mixed views on fixed interest (bond) funds, on one hand they are seen as low to medium risk with low volatility and on the other hand there is a fear that when interest rates rise these funds will struggle to make any real returns. Without being able to see into the future (which no-one can) it is very hard to predict what will happen. One thing that is certain is that returns will not be at the same level as they have been over the past decade.
We recently had a meeting with Bryn Jones who manages the Rathbone Ethical Bond Fund. A perception from the past is that Ethical investing tends to compromise performance and therefore with lower returns this type of fund may not be the best option for investors looking for a corporate bond fund.
However, early into the meeting it was clear that although this is an ethical fund the performance is not compromised and it is one of the top 5 corporate bond funds over 5 years.
For investors wanting to invest in bonds with a high yield this fund may be an interesting option to consider.