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Hargreaves Lansdown Review

Topic: Hargreaves Lansdown 31 January 2017

A detailed analysis of Hargreaves Lansdown Own Funds 

  • 8 Hargreaves Lansdown funds holding £6.7 billion reviewed
  • 6 have ranked in the bottom 50% within their sectors for performance
  • Only 1 of their funds has delivered top performance consistently 

Recognised primarily as a ‘fund supermarket’ Hargreaves Lansdown’s investment platform (known as the vantage service) has been used by over 836,000 investors placing over £61 billion into a wide range of funds and different types of investments. 

Along with providing investors with access to a large selection of funds, they also manage a range of their own funds. At the time of writing, Hargreaves Lansdown currently manage 8 unit trust and OEIC funds that have at least 1 years history.

This review focuses on these 8 funds, which combined hold almost £7 billion of client money. Each fund was analysed for both performance and ranking alongside all other competing same sector funds over the course of the 1, 3 & 5 year period up to January 2017.

As detailed in this report, our analysis identified that 6 of the 8 Hargreaves Lansdown funds reviewed have ranked in the bottom 50% in their sectors for performance.

Hargreaves Lansdown Fund Performance Summary 

For our Hargreaves Lansdown fund review we analysed 8 of their unit trust funds. Each fund was given a consistent 5 year performance rating that reflects the performance and ranking of each fund in comparison with other funds operating in the same investment sectors.

Top – A fund that consistently ranks within the top 25% of performers it’s respective sector over the recent 1, 3 & 5 year period is rated as consistently top performing.

Mediocre – A mediocre rating is provided to funds that are unable to maintain consistent top quartile performance over 1, 3 & 5 years but rank higher than at least 50% of competing funds during this period. 

Poor – Funds that rank in the bottom 50% of performers within their sector at anytime during the 1, 3 & 5 year periods analysed are ranked as poor.

No 5 Year History – A consistent performance rating is only applied to funds that have at least 5 years history. 

Hargreaves Lansdown Fund Performance Summary Table.png 

As highlighted in the above summary table, only 1 of the funds currently managed by Hargreaves Lansdown has delivered consistent top quartile sector performance for their investors over the recent 5 year period, with the significant proportion rating as poor by performing in the lowest 50% within their sectors.

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The Majority of Hargreaves Lansdown Funds Have Underperformed

Our analysis identified that 6 of the 8 Hargreaves Lansdown multi manager funds reviewed have underperformed. The ‘HL Multi Manager Strategic Bond’ fund has consistently under delivered. This fund returned 5 year growth of 31.2% which was less than half of that achieved by the top performing fund in its sector.

Despite ranking 16th out of 147 funds in its sector over the recent 5 year period, the ‘HL Multi Manager Equity & Bond’ fund has steadily fallen down the ranks in its sector. Over the recent 12 months it has been outperformed by 64% of competing same sector funds.

3 of the 8 funds reviewed have less than 5 years history. However, over the recent 12 months 2 of these funds have performed poorly in comparison to other same sector funds. One of their relatively new funds was the ‘HL Multi Manager European’ fund. This fund achieved growth of 19.85% over the past year, which was lower than that returned by 75% of same sector funds. 

Top Performance From Hargreaves Lansdown’s Balanced Managed Fund

The Hargreaves Lansdown fund that has been the most impressive was the ‘HL Multi Manager Balanced Managed’ fund. This fund has consistently outperformed 75% of same sector funds during the 1, 3 & 5 year period analysed, with impressive 5 year returns of 67.02%. By maintaining consistent top quartile sector performance, this fund has proven its ability to deliver within the highly competitive ‘Mixed investment 40%-85% Shares’ sector and currently represents an excellent investment option for consumer investors.

Overall Assessment of Hargreaves Lansdown funds 

It is clear from our performance analysis that investors have a lack of competitive choices from Hargreaves Lansdown’s selection of managed funds. With the exception of their Balanced Managed fund, all of their funds have struggled for competitive performance and with a wide range of better performing fund options available from other fund manager, investors who wish to maximise their portfolio growth may wish to look elsewhere.

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