abrdn Ethical Corporate Bond Fund Institutional Accumulation

Fund objective

Investment Objective To generate income and some growth over the long term (5 years or more) by investing in sterling denominated investment grade corporate bonds which adhere to the abrdn Ethical Corporate Bond Investment Approach. Performance Target: To be top quartile within the fund's peer group; defined as the Investment Association Sterling Corporate Bond Sector, over rolling five-year periods (after charges). There is no certainty or promise that the Performance Target will be achieved. Due to the ethical nature of the management process, there are a material number of stocks and sectors that the fund is unable to invest in while other funds in the Investment Association Sterling Corporate Bond Sector can, which means the fund's performance profile may deviate significantly from that of the Investment Association Sterling Corporate Bond Sector average. The Investment Association Sterling Corporate Bond Sector (the "Sector") is a representative group of investment funds with a focus on sterling denominated investment grade bonds issued by companies. Investment Policy Portfolio Securities - The fund will invest at least 60% in sterling denominated investment grade corporate bonds (which are like loans to companies that pay interest and are typically regarded as having a low default risk) issued anywhere in the world. - The fund may also invest in other bonds, including high yield bonds (which are like loans to companies or governments that pay a high rate of interest but have a lower credit rating than investment grade bonds). The fund will employ techniques to reduce (hedge) risk related to currency movements on non-sterling bonds. - The fund may also invest in other funds (including those managed by abrdn), cash and assets that can be turned into cash quickly. - All investments will adhere to the abrdn Ethical Corporate Bond Investment Approach (the "Investment Approach") as set out in the prospectus. - The fund applies a set of company exclusions which are related but not limited to fossil fuels, animal testing, weaponry, pornography, gambling, tobacco and alcohol. - In addition, the investment team carries out qualitative and quantitative assessment of companies' ESG characteristics. - The qualitative assessment utilises abrdn's fixed income investment process, which enables portfolio managers to assess how ESG factors are likely to impact on the company's ability to repay its debt, both now and in the future. A key component of this is the ESG Risk Rating, which enables the management team to qualitatively identify and avoid ESG laggards. - The quantitative assessment utilises the abrdn ESG House Score to evaluate how companies manage their ESG risks and assigns a score accordingly. The global universe of scored companies is then sorted and split into 7 equal groupings, with at least 70% of the fund invested in companies in the top two groups. Management Process - The management team use their discretion (active management) to identify investments based on analysis of global economics along with analysis of an investment's prospects and creditworthiness (debt repayment ability) compared to that of the market. - In seeking to achieve the Performance Target, the Markit iBoxx Sterling Collateralized & Corporates Index (the "Index") is used as a reference point for portfolio construction and as a basis for setting risk constraints. Due to the ethical nature of the management process, there are a material number of companies and sectors in the Index that the fund is unable to invest in, which means the fund's performance profile may deviate significantly from that of the Index, which is a representative index of the market for sterling denominated bonds issued by companies. Please Note: The fund's ability to buy and sell bonds and the associated costs can be affected during periods of market stress which could include periods where interest rates move sharply. Derivatives and Techniques - The fund will make routine use of derivatives to reduce risk, reduce cost and/or generate additional income or growth consistent with the risk profile of the fund. - Derivatives are linked to the value of other assets. In other words, they derive their price from one or more underlying asset. They can generate returns when the value of these underlying assets rise (long positions) or fall (short positions). - Derivatives include instruments used to manage expected changes in interest rates, inflation, currencies or creditworthiness of corporations. Investors in the fund may buy and sell shares on any dealing day (as defined in the Prospectus). If you invest in income shares, income from investments in the fund will be paid out to you. If you invest in accumulation shares, income will be added to the value of your shares. Recommendation: the Fund may not be appropriate for investors who plan to withdraw their money within five years. Investors should satisfy themselves that their attitude to risk aligns with the risk profile of this fund before investing