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Connecting social and financial outcomes that aim for consistent growth
The Threadneedle UK Social Bond Fund is a UK credit fund that targets positive social outcomes, seeking to unlock the full potential of corporate bonds to deliver both financial and social returns.
The Fund aims to achieve total return (by way of income and capital appreciation) through investments which support socially beneficial activities and developments, in eight areas: affordable housing, education, employment and training, health and social care, financial inclusion, community services, transport and communication infrastructure, utilities and the environment.
Big Issue Invest acts as a social adviser to the fund, reviewing and challenging the Fund’s investments from a social performance perspective.
Strength in partnership
Our strong reputation across both bonds and social investment is enhanced by our partnership with Big Issue Invest, social entrepreneurs and a leader and innovator in backing sustainable social businesses.
The first fund to unlock the full potential of bonds to deliver both financial returns and positive social outcomes. Using a dynamic social assessment methodology to guide investment decisions, the portfolio manager actively sources assets that combine clear social benefits with sound financial attributes.
Consistent track record in social bond investing
We have managed outcomes-focused social bond strategies for over five years and we aim to provide income with the prospect of some capital growth over the long term (5 years or more) for our investors.
Social Investment Guidelines
Un sustainable development goals and our themes
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We use an outcomes-focused approach to deliver both social and financial returns. We first identify bonds that conform to eight key social fields set by Big Issue Invest to form a social universe of 350-400 securities. Eligible investments are then ranked by our Responsible Investment team to evaluate the ‘social intensity’ of qualifying bonds, with each security is ranked as high, medium or low social intensity.
This is not a simple box-ticking exercise, but involves a three-dimensional approach to the social implications of each issue. At the most basic level, bonds invested in promise measurable outcomes in one of the eight social fields; next, our analysis draws on a number of factors to judge the social outcome. Here, geography is a key driver – where the outcome occurs is important. The next level of detail looks at localities, using indicators which show where deprivation levels are most severe.
Our investment grade credit team evaluates these bonds using our established credit research process to ensure that investment ideas meet the necessary financial and liquidity requirements for inclusion within the portfolio. The portfolio manager has ultimate responsibility for final portfolio construction and targets a third of the exposures in each of the three high, medium and low social intensity buckets.
Note: Use of the SDG logos does not imply UN endorsement.
Responsible Investment Quarterly - Q3 2020
The future of food: Eat or be eaten
How airports are flying high: a social perspective
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Simon Bond joined the company in 2003 and has been the portfolio manager of the Threadneedle UK Social Bond Fund since its launch in 2013, as well as the Threadneedle (Lux) European Social Bond Fund which launched in 2017. Having previously managed a number of institutional and retail investment grade corporate bond portfolios, Simon now concentrates his focus on managing Columbia Threadneedle's social bond portfolios and developing other responsible investment strategies across the firm.
Simon has 34 years' experience in the fund management industry, with the last 29 years specialising in corporate credit. Throughout his career, Simon has taken a keen interest in the social investment space and as an analyst the first entity Simon reported on was Peabody Trust and the first sector he covered was housing associations. Simon is particularly passionate about the role of infrastructure in both regeneration and economic growth.
Prior to joining the firm, Simon managed £6 billion in his role as the Senior UK Credit Fund Manager for AXA. Simon also worked for GE Insurance as a Portfolio Manager, Provident Mutual as a Fixed Income Analyst and Hambros Bank as an Investment Accountant and Pension Fund Investment Administrator.
Simon is a Fellow of the Chartered Institute for Securities and Investment, holds the Investment Management Certificate and the General Registered Representatives Certificate.
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Past performance is not a guide to future returns and the fund may not achieve its investment objective. Your capital is at risk. The value of investments can fall as well as rise and investors might not get back the sum originally invested. The fund holds assets which could prove difficult to sell. The fund may have to lower the selling price, sell other investments or forego more appealing investment opportunities. Most bond and cash funds offer limited capital growth potential and an income that is not linked to inflation. Inflation is likely to affect the value of capital and income over time. Changes in interest rates are likely to affect the fund’s value. In general, as interest rates rise, the price of a fixed rate bond will fall, and vice versa. The investment policy of the fund allows it to invest in derivatives for the purposes of reducing risk or minimising the cost of transactions. The fund invests in securities whose value would be significantly affected if the issuer either refused to pay or was unable to pay or perceived to be unable to pay. The fund holds assets which could prove difficult to sell. The fund may have to lower the selling price, sell other investments or forego more appealing investment opportunities. Most bond and cash funds offer limited capital growth potential and an income that is not linked to inflation. Inflation is likely to affect the value of capital and income over time. Changes in interest rates are likely to affect the fund’s value. In general, as interest rates rise, the price of a fixed rate bond will fall, and vice versa. The investment policy of the fund allows it to invest in derivatives for the purposes of reducing risk or minimising the cost of transactions. Please read the Key Investor Information Document and the Fund Prospectus if considering investing.
Threadneedle Opportunity Investment Funds ICVC (“TOIF”) is an open-ended investment company structured as an umbrella company, incorporated in England and Wales, authorised and regulated in the UK by the Financial Conduct Authority (FCA) as a Non – UCITS scheme. This material is for information only and does not constitute an offer or solicitation of an order to buy or sell any securities or other financial instruments, or to provide investment advice or services. The dealing price may include a dilution adjustment where the fund experiences large inflows and outflows of investment. Further details are available in the Prospectus. Subscriptions to a Fund may only be made on the basis of the current Prospectus and the Key Investor Information Document, as well as the latest annual or interim reports and the applicable terms & conditions. Please refer to the ‘Risk Factors’ section of the Prospectus for all risks applicable to investing in any fund and specifically this Fund. The above documents are available in English only and may be obtained free of charge on request from Threadneedle Investments at PO Box 10033, Chelmsford, Essex CM99 2AL. Issued by Threadneedle Investment Services Limited. Registered in England and Wales, Registered No. 3701768, Cannon Place, 78 Cannon Street, London EC4N 6AG, United Kingdom. Authorised and regulated in the UK by the Financial Conduct Authority (FCA). Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.