Just four of Hargreaves Lansdown’s 14 funds delivered value across the board, according to its 2022 assessment of value report, with nine strategies being flagged for areas that required either immediate action, or continued focus.
The annual assessment of value is mandated by the FCA, and Hargreaves Lansdown Fund Managers (HLFM) uses a traffic light system to identify whether value is being delivered for clients, or whether improvement is required.
The following four funds were labelled ‘red’ in terms of performance, one of seven metrics by which they are judged in the report, meaning that they did not deliver value to clients in that area:
- – HL Multi-Manager High Income
- – HL Multi-Manager Income & Growth Trust (now HL UK Income)
- – HL Multi-Manager Strategic Assets
- – HL Multi-Manager UK Growth
Fund performance was assessed in relation to their respective Investment Association sector benchmarks, across the funds’ minimum recommended holding period, rolling periods of five years, and in terms of relative 12-month performance from 1 October 2021.
All of the five funds named above languished in the third and fourth quartiles over the past one, three, and five years. The HL Multi-Manager UK Growth fund has returned 9.5% over the last five years compared to 22.6% for its benchmark, the IA UK All Companies, and the £3.6bn HL UK Income fund has lagged the IA UK Equity Income sector by a similar magnitude.
The HL Multi-Manager Strategic Assets fund has returned just 9.7% compared to 26.1% by the IA Flexible Investment index, while the £483m HL Multi-Manager High Income fund was the closest to its benchmark over five years, but still lagged it by more than three percentage points.
A further five funds were labelled as ‘amber’ when it came to delivering performance value for investors, meaning they require continued focus.
The HL Growth Fund, which was launched in December 2021, was not judged on its performance as it did not fall within the required time horizon, and the HL US fund, which launched in October 2022, was not included at all.
The ratings represent a backward step from 2021, when the firm had two ‘red’ and six ‘amber’ rated funds under the same ‘performance’ pillar.
Overall, nine of the 14 funds were considered to represent value overall.
