- AJ Bell made two changes to its Favourite Funds list in Q2 2025
- Rathbone Ethical Bond fund was added to the list, with the CT Responsible Sterling Corporate Bond fund being removed
- The latter fund’s duration and credit risk are managed within much narrower bands versus a mainstream index, which has led to some underwhelming returns
Paul Angell, head of investment research at AJ Bell, comments:
“To ensure we remain confident in the funds included in our Favourite Funds list, it is under constant review, with thousands of different funds being considered at any one time. As part of this process, we analyse each fund’s investment strategy, the fund’s managers, and their teams. This allows us to ensure we have the highest conviction in the funds that comprise the list so that it can deliver for the myriad needs of the investors that use it.
“Following a recent review, we made a couple of updates in the second quarter of this year – adding the Rathbone Ethical Bond fund and removing the CT Responsible Sterling Corporate Bond fund. We explain the rationale behind the changes below.”
- Added: Rathbone Ethical Bond
“The Rathbone Ethical Bond fund is a highly credible sterling corporate bond offering, with a long-established approach to ethical investing. In fund manager Bryn Jones, the fund has an extremely experienced lead who’s supported by a small but dedicated team of fixed income investment analysts. The fund usually takes on more credit risk compared to others in its sector, while interest rate risk is actively managed within two years of mainstream indices.
“When it comes to sustainability, the team exclude companies associated with armaments, animal welfare issues, tobacco, nuclear power, alcohol, predatory lending and environmental or high-carbon impact. They also seek out companies with well-developed practices and policies in managing environmental impacts, human rights, provision of beneficial products and services, corporate community investment and employment opportunities.”
- Removed: CT Responsible Sterling Corporate Bond
“To make room for the Rathbone Ethical Bond fund on the list, we’ve removed the CT Responsible Sterling Corporate Bond fund. Compared to the Rathbone fund, the CT fund’s duration and credit risk are managed within much narrower bands versus a mainstream index. This conservative approach has led the CT fund to post some underwhelming relative returns over time, which was a factor in its removal alongside the need to make room for the Rathbone fund.”
AJ Bell Favourite Funds explained:
AJ Bell Favourite Funds is a list of funds across different sectors and risk appetites that have been extensively researched and selected by our in-house investments team, designed to help investors with their own investment research. The list is chosen by our investment specialists, is regularly updated, and features only funds that we believe offer a combination of a clear and robust investment philosophy and process, a proven management track record and value for investors.