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Rathbones launches new sustainable bond fund for Jones and Chilvers

27 November 2023

The Rathbones Greenbank Global Sustainable Bond fund will go live on Thursday.

By Matthew Cook,

Reporter, Trustnet

Asset manager Rathbones is to launch a new sustainable bond fund this week headed by Bryn Jones and Stuart Chilvers, who together already manage the popular Rathbone Ethical Bond portfolio as well as the Rathbone Strategic Bond fund.

The new Rathbone Greenbank Global Sustainable Bond fund will focus on sustainable themes aligned with the UN Sustainable Development Goals and invest in government, investment grade and high yield bonds denominated in dollars, euros and pounds.

A screen, provided by the research team of Greenbank, will be used to rule various industries including alcohol, animal welfare violations, armaments, extraction of oil, gas and thermal coal, gambling, nuclear power, pornography, tobacco and poor practices with respect to environmental management, employment or human rights.

It will be run using the team’s ‘Four Cs Plus’ investment process. Character determines if a company's managers “have integrity and competence”, while capacity ensures a company is not over leveraged.

Collateral looks for assets backing the loan, while covenants are combed through to check the terms of the agreements. The final part is conviction, which can be either in line with consensus or contrarian as long as it is “always opinionated”.

Bryn Jones, fund manager of the Rathbone Greenbank Global Sustainable Bond fund, said: “Regulation is leading to a higher cost of capital for [environmental, social and governance] ESG laggard companies and carbon intensive industries.

“Further, stricter disclosure requirements are making evaluation of high yield and emerging market debt opportunities significantly easier in terms of meeting our sustainability criteria.”

The new fund will launch on Thursday 30 November.

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