Rathbone SICAV High Quality Bond Fund

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Why invest in the High Quality Bond Fund Fund?

• A defensive bond fund taking limited credit and interest rate risk
• At least 80% of the portfolio has a credit rating of at least A- or above – the very best of investment grade
• Aims to keep its sensitivity to interest rate changes low
• Targets a return of Bank of England’s benchmark interest rate + 0.5% 

We buy predominantly sterling bonds with very strong credit ratings issued by companies, the UK government and non-governmental organisations. At least 80% of our portfolio must be in bonds with a credit rating of A- or higher – four grading notches above high-yield. While we can buy bonds with longer maturities, we aim to keep our overall portfolio’s duration, or sensitivity to interest rates, below five years.  

When picking our investments, there are three assessments we make. First, we look at the economic environment to determine which industries we want to own and the duration of our investments. Then we use the Four C approach to evaluate creditworthiness. We assess:

• Character: Whether a company's managers have integrity and competence
• Capacity: Ensuring a company isn't over-borrowing and has the cash to pay its debts
• Collateral: Are there assets backing the loan, which reduces the risk of a loan
• Covenants: These loan agreements set out the terms of the bond and restrictions on the company

Finally, we compare prices to determine the best value bonds to include in our fund. We aim to preserve capital and deliver a return higher than the Bank of England's benchmark interest rate + 0.5%, after fees, over any rolling three-year period. There is no guarantee that this investment objective will be achieved over three years, or any other time period. We use this target because we aim to provide a return above what you would receive in a UK savings account. Although, this is an investment product, not a cash savings account, so your capital is at risk. You can find our fund’s full objective and investment policy in our Key Investor Information Document (KIID).