F&C Fund Management
Ethical Bond Fund
Aim: To maximise returns through investment primarily in fixed interest securities of an ethically screened and diversified list of companies. To manage risk the fund aims to achieve a wide degree of diversification across the available issuers and the manager will adopt a rigorous credit management process
Minimum investment: Lump sum 1,000
Isa link: Yes
Charges: Initial 5% and annual management charge 1%
Commission: Initial 3% and renewal 0.5%
Tel: 08457 99 22 99
This fund applies an ethical screening criteria similar to those used by the F&C stewardship range of funds, combining F&Cs fixed interest capabilities with the expertise of the governance and sustainable investment team.
The ethical bond is screened on a range of both positive and negative criteria selected by an independent policy committee and, according to F&C, actively targets credits from issuers which contribute to sustainable development.
The Ethical Partnership director Jeremy Newbegin says: There are only a small selection of ethical corporate bond funds so F&C’s launch was most welcome!
He believes the main competitors will be Aegon’s ethical corporate bond fund, Aviva sustainable future corporate bond fund, Ecclesiastical amity corporate bond fund, Rathbone ethical corporate bond fund, Royal London ethical corporate bond fund and Standard Life ethical corporate bond fund.
The fund invests in investment grade and high-yield fixed-interest securities, including warrants, collectives, money market instruments and derivatives. The fund does not invest in gilts, which Newbegin says will be attractive to many ethical investors.
Other attractive features for Newbegin include the annual charge of 1 per cent and initial charge of 5 per cent are in line to market averages including the adviser remuneration. He says the fact that the annual management charge is taken out of income, not capital, will be a comfort to most adviser, although it will reduce the yield.
The only real downside for Newbegin is that dividends are only paid twice a year.
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average