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Hargreaves Lansdown adds to struggling fund range

26 January 2023

The platform launches three new portfolios for beginner investors.

By Matteo Anelli,

Reporter, Trustnet

Hargreaves Lansdown has announced the launch of three new ready-made investment portfolios: HL Adventurous Managed, HL Moderately Adventurous Managed and HL Balanced Managed, which will start trading on 8 March.

The three new funds of funds will invest in a mixture of third-party funds, exchange-traded funds (ETFs) and Hargreaves Lansdown’s own portfolios and are designed to offer investors diversified access to a range of global equities and bonds.

Each one of them is built as a one-stop shop, and is therefore particularly suitable for beginner investors, according to the firm. New investors will only need to choose between the three options according to their own personal goals and attitudes towards risk, leaving everything else to the portfolio managers.

The more defensive option of the three is HL Balanced Managed Portfolio, which is optimised for investors with a five-year horizon and aims to have between 50% and 70% of the volatility of global equity markets. It can be used on its own or as the core part of a wider portfolio and charges an ongoing charges figure (OCF) of 0.92%.

The middle option, HL Moderately Adventurous Managed Portfolio, will have a greater weighting to stocks as opposed to bonds and, for an OCF of 0.98%, aims for higher returns in exchange for somewhat higher volatility (70-90% of global equity markets).

HL Adventurous Managed is a pure equity fund, making it better suited for investors who are happy to part with their money for at least 10 years instead of five and can stomach volatility at 90-110% of global equity markets.

Hargreaves recommends this solution as a stand-alone investment for the most adventurous investors, or as the global equity component of a diversified portfolio. The OCF is 0.99%.

The firm is to launch the new strategies at a time when the rest of its stable has struggled. Indeed, Hargreaves’ multi-manager portfolios achieved mixed returns over the past year, with the best performer being HL Multi-Manager European – the only fund of the list to make a gain (it grew 0.1% over the past 12 months).

All other funds made losses, ranging from -1% (HL Multi-Manager Strategic Assets) to -8.1% (HL Multi-Manager Strategic Bond).

Nine of the 13 portfolios in the firm’s stable with a requisite track record and appropriate peer group underperformed over 12 months, according to data from FE Analytics while 10 of the 11 funds with a long enough track record over five years failed to match the sector average returns. HL Select UK Growth was the exception.

The latest launch is part of the company’s strategy to expand and improve its investment range and follows the launch of the HL US fund in November 2022, which had assets under management of £723m at 24 January.

All of the latest funds are intended for those looking to invest but unsure where to start, said David Smith, senior fund manager at Hargreaves Lansdown.

“HL actively manages the portfolio, and the managers will combine funds, using asset allocation techniques, to blend asset classes for diversification.”

All three vehicles will trade at a fixed offer launch price of £1 per unit until 7 March and require a minimum investment (a lump sum of £100 or £25 by direct debit) to buy. The platform charges an additional 0.45% on top of the cost of each fund.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.