Hargreaves Lansdown (HL) has flagged four funds on performance concerns in its latest assessment of value report.
The ‘red-flagged’ strategies were the HL Select UK Income, HL Multi-manager UK Growth, HL Emerging Markets and the HL Global Bond funds. The Select UK Income and Multi Manager UK Growth funds were said to represent value overall but require additional focus. The £150m Emerging Markets and £667m Global Bond strategy, however, were found to offer poor value overall.
Following last year’s report, the investment platform overhauled the funds that were flagged.
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On the HL Global Bond fund, the firm said that changes were being made to improve the offering with fees being reduced by 10%. The strategy has returned 2.91% over five years, according to FE Fundinfo data, lagging the IA Sterling Strategic Bond sector average of 7.37%.
While HL said that manager selection had contributed positively over the past year, the global allocation was a headwind against a peer group with a predominantly biased towards UK bonds.
Similarly, HL has reduced fees on its emerging markets fund by 11 basis points. After the fund was flagged in last year’s report, it was repositioned towards a more disciplined approach with a focus on Emerging Markets rather than Asia & Emerging Markets. HL also removed three managers and added one over the course of 2024. The fund was in the third quartile of performers within the IA Global Emerging Markets sector over five years, according to FE Fundinfo.
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Hargreaves Lansdown CO Toby Vaughan said: “Following a period of developments across our proposition and investment processes, the focus over the past year has been on continual improvement in both, as well as the delivery of results in the form of performance.
“The trends have been positive with the majority of the multi-manager funds improving their performance and outperforming comparators over the past year.”