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Here’s a bond fund with a difference. Not only is the fund aiming to deliver returns to investors in line with what a traditional bond fund would deliver, but it is doing this by supporting and funding socially beneficial activities and developments, primarily in the UK. An approach that firmly focuses on the ‘S’ in ESG investing (Environmental, Social, and Governance).
Who's it for? All investors
What if you could invest in a fund that supports activities such as affordable housing in the UK? What if that fund also supports education and learning, while promoting community services and employment training? And what if that same fund is managed with an aim to deliver you an investment return? This is exactly what the Threadneedle UK Social Bond Fund does – investing in socially beneficial activities.
In 2014, a remarkable event took place in the world of investments. Based on a partnership between Big Issue Invest (the social investment arm of The Big Issue, the UK’s best known social brand) and Columbia Threadneedle Investments, an investment fund was launched to help bring social investment into the mainstream market. As a result, the Threadneedle UK Social Bond Fund was a launched – a first of its kind.
Investing in bonds is effectively lending your money to companies and governments. The money is typically used to invest and build some form of growth. That growth could be increased profits for a company, or increased tax revenue for a government, which could potentially be used to repay the bond. As an investor, you are hoping to receive regular income payments from the bond you invest in, and to get your money back at the end of the term.
With a social bond, investors are lending money to companies and governments to invest in projects with positive social outcomes. Examples include lending money to build affordable housing for vulnerable and low-income households, lending money to promote employment opportunities in underperforming areas of the country and lending money to promote training and education across society. And while the aim of each of the bonds is to invest in socially beneficial causes, investors still expect a return on their investment.
This fund aims to invest in a wide selection of bonds issued by organisations to deliver clear social outcomes. At the same time, the fund aims to deliver a respectable financial return in line with those generated by mainstream UK corporate bond funds. This is important because the team does not believe that financial returns need to be sacrificed to produce a positive social impact.
The team at Threadneedle isn’t limited to investing just with companies that are listed on the stock market because social bonds also offer opportunities to work with, and invest with, organisations such as charities, housing associations, and government associations.
The Threadneedle UK Social Bond Fund could make an interesting addition to your investment portfolio, giving you exposure to an increasingly popular and important market. In addition to this fund, there are three funds on the Barclays Funds List which have an ESG (Environment, Social, and Governance) approach to investing in the shares of companies. Find out more information on these funds.
Correct at the time of publishing.
To diversify your investment, you may like to consider our own Barclays Ready-made Investments (RMI). The RMI are just one example of a range of diversified funds which allow you to select the level of risk you are most comfortable with. These multi-asset funds invest in passive funds across a range of asset classes and regions, offering a globally diversified solution for investors. Ready-made Investments are not the only funds that we offer and they won’t be appropriate for everyone.
Past performance of the fund and its manager are not a reliable indicator of their future performance.
We don’t offer personal investment advice so if you’re unsure you should seek that independently.
Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.
These are our current opinions but the future, as ever, is uncertain and outcomes may differ.
Read the Assessment of Value report [PDF, 3.2MB] for funds run by Barclays.
The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and their effects on you will depend on your individual circumstances.
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