ESG Fund Factsheet

For adviser use only

Royal London Ethical Bond

Classification: Ethical / Negative Screening
Management style: Active

Introduction

Royal London Ethical Bond is an established strategic Bond with a long track record and a clear negatively screened investment process.

Name Launch Date IA Sector Portfolio OCF* Fund Size (m)
Royal London Ethical Bond 26/11/2012 Sterling Strategic Bond 0.55% £1,561.42*

*As at 31/07/2022

About Royal London

Royal London Asset Management (RLAM) was established in 1988 as a wholly-owned subsidiary of the Royal London Group. They are primarily focussed on providing asset management services to UK clients, and offer a broad range of strategies across a range of core asset classes.

RLAM believe that good investors are good owners. Environmental, Social and Governance issues are increasingly affecting asset prices and they believe it is in the best interests of clients to integrate these issues into the investment process.

ESG Process

The Ethical Bond fund is a negatively screened portfolio with positive criteria also factored in.

The process starts with their in house investment team researching companies utilising MSCI ESG Research and Glass Lewis.

The ethical framework excludes companies breaching their criteria and identifies ‘best of breed’ companies making a positive impact on society.

Royal London have a large sustainable investment team, headed by Mike Fox, one of the fund managers on this range. The team which were established in 2003 have vast experience investing sustainably and work closely together on their ESG processes.

Positive Screening

The positive screening process looks it identify companies making a positive impact but the stock selection is primarily driven by negative screening.

Exclusion Policies

Companies that generate over 10% of their turnover from any one or a combination of the following five categories are excluded:

  • Alcohol
  • Armaments
  • Gambling
  • Tobacco
  • Pornography

Key Themes

At Royal London, they regularly engage with the companies to influence positive behaviour, governance and internal practices. Their six corporate engagement themes are:

  • Climate risk
  • Diversity
  • Social & Financial Inclusion
  • Circular economy
  • Governance
  • Innovation, technology & society

Cost

The OCF for this fund is 0.55%. This offers a good value for an actively managed impact strategic bond fund.

Investment Performance

The fund is underperforming the sector over 1, 3 and 5 years.

Source FE Analytics, performance measured to 14/09/2022

Past performance is not a reliable indicator of future performance.

Platform availability

Royal London Ethical Bond fund is available on the following platforms:

  • Abrdn Wrap
  • Abrdn Elevate
  • Advance – Embark
  • AEGON
  • AJ Bell
  • Ascentric
  • Aviva
  • Embark
  • Fidelity
  • Hubwise
  • James Hay
  • Novia
  • Nucleus
  • Transact

Supporting documents

Tenet Opinion

These are a range of established funds run by a very experienced sustainable investing team who have also developed a robust ESG/sustainable policy.

Exclusions are limited in this portfolio and wouldn’t be suited to clients with strong preferences to negative screening. For example, they won’t automatically exclude an alcohol production company with good governance, water management processes and robust recycling process.

Clients who are wanting to invest positively and in companies who are improving processes should consider these funds.

Information approved for Professional Adviser use only and should not be relied upon by private investors (this is not for Retail Clients).