Rathbone High Quality Bond Fund expands to the wider market

Rathbone Unit Trust Management Ltd (Rathbones) announces that, following the successful launch of the Rathbone High Quality Bond Fund to cornerstone investors, it today introduces the fund to a broader base of investors in the UK.

The fund is managed by Noelle Cazalis and will be made available to Continental European investors via a Luxembourg-domiciled SICAV in due course.

The objective of the fund is to focus on capital preservation while seeking to pay income over any three-year period through a portfolio of high quality, liquid bonds. The fund aims to invest 80% in A- or above rated bonds. For performance comparison only, the benchmark will be the iBoxx £ Overall A 1-5 year, reflecting the average credit quality of the fund as well as the short-to-medium term maturity of its holdings. The fund has no duration constraint.

Investors should be willing and able to commit to an investment horizon of at least three years and preferably longer.

The fund typically invests in global corporate and G10 government bonds*, with at least 80% of the fund invested in securities with a credit rating of A- and above. The remaining 20% may be invested at the manager’s discretion in government bonds, non-rated bonds or BBB-rated investment grade bonds. The fund’s current yield to maturity is 1.27%**, with an income yield of 2.8% (average coupon)**. Income is paid quarterly.

Noelle Cazalis is supported in credit analysis and selection by the broader fixed income team, led by Rathbones’ head of fixed income, Bryn Jones. 

The I-class shares are available with the following charges:

Share class

Annual Management Charge

OCF (capped)

Total MiFID II charges

I-class

0.35%

0.50%

0.54%

The minimum investment level is £1000.  The share class will be made available across a number of mainstream platforms.

The Rathbone High Quality Bond Fund sits in the Investment Association’s £ Corporate Bond sector. As per the sector requirement, at least 80% of the portfolio must be invested in sterling denominated bonds or hedged back to sterling. For the purposes of the new fund, it is envisaged that all non-Sterling denominated positions will be hedged back to Sterling.

Mike Webb, chief executive, Rathbone Unit Trust Management, said: “Increasingly, clients are telling us that they are uncomfortable holding significant assets in cash and are concerned over their fixed income exposure, particularly at the lower-quality end. Building on the success of Rathbones’ fixed income franchise, we believe the Rathbone High Quality Bond Fund meets that requirement, as well as adding value to the ‘sleep-easier’ part of their portfolios.”

He added: “Noelle has worked with the fixed income team for many years now and has been an invaluable asset to the existing bond funds and the wider research team.”

Noelle Cazalis, fund manager, Rathbone High Quality Bond Fund, said: “As the outlook for rates is uncertain and as we near the back end of the credit cycle, we aim to provide a cautious option within fixed income portfolios. We believe investors only have a limited number of options to de-risk, so the fund should add to their tool-kit. By focussing on high quality credit names, the fund should help to limit maximum drawdowns in portfolios when markets are jittery. In the meantime, the yield offers a meaningful pick-up versus cash.”  

Past performance should not be seen as an indication of future performance. The value of investments and the income from them may go down as well as up and you may not get back your original investment

 

For further press information, please contact:

 

Sam Emery/Emma Murphy

Quill PR

020 7466 5056/5054

sam@quillpr.com/emma@quillpr.com

Madhu Kalia

PR - Rathbones

020 7399 0256

madhu.kalia@rathbones.com

 

Notes to editors

*Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, United Kingdom, United States.

**All figures as at 31 July 2019

 

Current credit quality distribution (at 31 July 2019)^:   AAA                                                 22.14% AA+                                                    1.01% AA                                                      8.01% AA-                                                   11.37% A+                                                     13.09% A                                                        12.99% A-                                                      21.56% BBB+                                                 5.54% BBB                                                    1.31% NR                                                      1.97% Cash                                                   1.01%

 

Current maturity distribution (at 31 July 2019):   0-3 years 51.90% 3-5 years 34.94% 5-10 years 11.74% 10+ 0.41% Cash                                                   1.01%     Modified duration       2.07 years

 

The launch date for the Rathbone High Quality Bond Fund S-class shares was 16 November 2018.

The current AUM of the Rathbone High Quality Bond Fund is £152m, as at 31 July 2019.

 

Noelle Cazalis, Fund Manager

Noelle joined Rathbones in July 2011 and was made assistant manager on the Rathbone Ethical Bond Fund and Rathbone Strategic Bond Fund in January 2016. Noelle works with Bryn Jones, providing in-depth credit analysis for the above bond funds and Rathbone’s fixed income committee. She also assists the Rathbone Multi-Asset Portfolios team with its bond security selection.

 

Bryn Jones, Head of Fixed Income

Bryn Jones is the Head of Fixed Income for Rathbones and is lead manager on the Rathbone Ethical Bond Fund and the Rathbone Strategic Bond Fund. He joined Rathbones in November 2004 from Merrill Lynch. Bryn is a member of the Rathbone Strategic Asset Allocation Committee, Non-Executive Chairman of Rathbones' Fixed Income Committee, and an adviser to the Rathbone Banking Committee. He is a WMA representative for the HMT DMO’s (Her Majesty’s Treasury - Debt Management Office) Gilt market consultation process.

 

Rathbone Unit Trust Management

Rathbone Unit Trust Management Limited is a wholly-owned, London-based subsidiary of Rathbones Group plc. In 1995 and 1996 respectively, Rathbones Group acquired stockbrokers Laurence Keen and Neilson Cobbold, securing many private wealth managers, and their clients. The company also acquired unit trusts from Laurence Keen Unit Trust Management including the Rathbone Income Fund - the success of which led to a rebranding of the operation in 1999 to Rathbone Unit Trust Management Limited. Through its subsidiaries, the parent company manages £49.2 billion of client funds, of which £6.7 billion is managed by Rathbone Unit Trust Management Limited. (As at 30 June 2019).

About Rathbones Group Plc: rathbones.com

Rathbones Group Plc, through its subsidiaries, is one of the UK’s leading providers of investment management services for individuals, charities and professional advisers. This includes discretionary investment management, unit trusts, tax planning, trust and company management, financial advice and banking services. The company has over 1,400 staff in 16 locations across the UK and Jersey.