Keep in mind that our commentary on the fund, as well as its past performance, is not a guarantee of what will happen in the future. It is also not financial advice – you should consider talking to a professional adviser if you're not sure whether an investment is right for you.
These investments are designed to be held for the long term. Like all investments, your money is at risk – investments can go down as well as up, currency fluctuations can affect the value of your investment, and you may not get back what you put in.
How does the fund work?
The Triodos Sterling Bond Impact Fund aims to generate a positive impact on society and the environment, while also delivering a stable income, by investing in a diversified portfolio of bonds.
Unlike shares, bonds are loans made to companies or governments. These loans pay a fixed rate of interest over a set period, offering a regular income. The fund invests in corporate bonds, green and social bonds, and UK government bonds (Gilts), with a focus on higher-impact issuers.
Economic and market context
During the fourth quarter, bond yields across economies showed some convergence. In Europe, yields dipped in October, but rose again in December as markets anticipated that lower rates would be maintained for a shorter period. US yields traded broadly sideways, as conflicting economic data points cancelled each other out. In the UK, yields declined in October due to weak economic activity and signals from the Chancellor that the autumn budget would impact the markets.
Performance update
The Triodos Sterling Bond Impact Fund did well in the fourth quarter of 2025, with a return of 2.15% before fees. This was 0.11% higher than its benchmark. The fund did better because it had more corporate bonds and fewer gilts (UK government bonds). However, picking higher quality government bonds made returns a bit lower. Changes in the shape of the interest rate curve did not have much effect in this quarter. Although all types of bonds went up in value, corporate bonds did better than government bonds. The yield curve also became flatter compared to the third quarter.
Portfolio engagement
During 2025 we continued to engage with the entities that the fund invests in, to drive positive change. The only issuers that we may not have engaged with are those for which we hold only green or social bonds.
Return
As of 31/12/2025
| 1M | 3M | YTD | 1Y | |
| Triodos Sterling Bond Impact Fund KR-cap | 0.32% | 1.93% | 5.49% | 5.49% |
| Triodos Sterling Bond Impact Fund KR-dis | 0.28% | 1.92% | 5.45% | 5.45% |
| Benchmark | 0.33% | 2.04% | 6.11% | 6.11% |
Calendar year return
| 2025 | 2024 | 2023 | |
| Triodos Sterling Bond Impact Fund KR-cap | 5.49% | 0.78% | 5.92% |
| Triodos Sterling Bond Impact Fund KR-dis | 5.45% | 0.78% | 5.90% |
| Benchmark | 6.11% | 1.85% | 6.25% |
Benchmark: Bloomberg Barclays UK Gilt 1–5-year Total Return Unhedged GBP index (50%) and the Bloomberg Barclays Sterling Non-Gilts Total Return Value Unhedged GBP index (50%). Returns incorporate the ongoing charges, but do not take into account the impact of the annual service charge on the performance of your investment.
Investing glossary of terms
Asset | Anything of value owned by an investor or company. |
Benchmark | A reference point against which the performance of an investment or fund can be compared. |
Bond | A bond is a fixed-income investment where money is lent to companies or governments for a set period of time, in return for regular interest payments. The Triodos Sterling Bond Impact Fund invests in a portfolio of bonds including corporate bonds, green and social bonds, and UK government bonds (gilts), with a focus on higher-impact issuers. |
Dividends | Payments made by a company to its shareholders or a fund to its investors, as a distribution of profits. |
ESG investing | Environmental, Social, and Governance (ESG) investing looks at how companies manage sustainability-related risks and opportunities. Triodos Impact Funds go beyond avoiding harm – instead actively choosing to do good. Read more about the difference between ESG and Impact Investing in our article. |
Exposure | The amount invested in a particular asset, sector, or market. |
Federal reserve | The Federal Reserve is the central bank of the United States of America. It conducts monetary policy, regulates and supervises banks, provides financial services for banks and the federal government, and maintains financial stability. |
Free cash flow | The cash a company generates after accounting for outgoing cash flows to support operations and maintain assets. |
Fund | A fund is a pool of money collected from multiple investors to be invested in a variety of assets. At Triodos, our Impact Funds are managed by Triodos Investment Management who make decisions on behalf of investors. |
Holdings | The individual securities or assets owned within a portfolio or fund. |
Interest rate | The percentage charged or paid for the use of money over a certain period of time. A country's ‘base rate’ is determined by its central bank, this can affect investment returns positively or negatively. |
Small, mid and large cap | This refers to a company’s “market capitalisation” which is a company’s value based on the total price of its outstanding shares. |
Portfolio | The collection of investments held by a fund. |
Valuation | The process of determining the current worth of an asset or company. |
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