- Out of the 18 funds offered by Hargreaves Lansdown, the majority (15) have shown underperformance when compared to their counterparts in the same sector
- The HL Growth fund returned growth of 12.07% this past year which was well above the sector average of 8.48%
- The HL Multi-Manager Asia and Emerging Markets fund has consistently ranked as one of the poorest performers in its sector over the last 1, 3, and 5 years.
- Out of the 18 funds, 14 have an annual fee that surpasses the average within their respective sectors
- Many Hargreaves Lansdown platform users invest in HL funds, unaware of their poor performance
In this article we highlight the best performing Hargreaves Lansdown funds as well as the worst, we analyse the performance, sector ranking and overall rating for each of the 18 HL funds offered.
Hargreaves Lansdown is the UK's biggest fund supermarket and a FTSE 100 company. They secured a dominant position in the self investor market with their investor platform responsible for administering more than £142 billion.
In recent times, they have leveraged their extensive online presence to expand their business model, focusing more on their fund management services. With a growth of over one-third in their fund range over the past 18 months, they now offer a total of 18 funds in the market, collectively managing £9.9 billion in assets.
Hargreaves Lansdown Funds
Hargreaves Lansdown's funds span multiple investment sectors making it essential to evaluate the performance of each fund compared to its sector peers to understand their effectiveness.
Our analysis of their funds’ performance identified that 83% of their funds have underperformed with only 3 maintaining a top quartile ranking over the recent 1 year period.
How Yodelar Rate Fund Performance
Hargreaves Lansdown Fund Performance
The table lists various funds along with key performance indicators, sector information, and ratings, giving a comprehensive overview of each fund over the most recent 1 ,3 & 5 year period.
* Performance figures are cumulative up to 27th May 2024 and are inclusive of fund charges only.
Hargreaves Lansdown Admit Poor Performance
Every year fund managers are required by the Financial Conduct Authority (FCA) to publish a value assessment report to clearly provide assessment on factors, such as performance and costs, and how much value their funds have delivered for investors.
Click here to access Hargreaves latest value assessment report
In their most recent report, Hargreaves Lansdown have flagged 2 funds as not delivering value, 3 funds as broadly delivering value and the rest as delivering value. But as identified in this analysis, the majority of their funds have consistently underperformed their sector peers.
The 2 funds Hargreaves Lansdown have noted as providing ‘poor value’ were their HL Multi-Manager Asia and Emerging Markets fund and HL Multi-Manager Strategic Bond fund. A further 3 of their Multi Manager funds were given an amber rating which they class as broadly providing value but requires continued focus.
The HL Select UK Growth fund was given a top rating in their value assessment report for performance and overall value yet this fund has ranked among the bottom 50% of performers in its sector over the past 3 & 5 years.
The Value Assessment report highlights concerns primarily around fund performance with 77% of the funds in the report rated as either underperforming or requiring further focus to deliver more performance related value.
Best Hargreaves Lansdown Funds
Despite the majority of their funds underperforming, our analysis identified 3 Hargreaves Lansdown funds that have recently excelled within their respective sectors. While we highlight these funds as the best performing Hargeave Lansdown funds, the choice to be invested in these funds should align with your overall objectives and risk appetite.
The top-performing funds from Hargreaves Lansdown are predominantly found in the mixed sector or the Volatility sector, showcasing a lack of positive performance from specific geographical sectors.
HL Moderately Adventurous Managed Fund
Among their most impressive funds is the HL Moderately Adventurous Managed fund. This fund is classified within IA Volatility Managed sector and returned 1 year growth of 12.04%, which ranked 27th out of 206 funds in the sector, well above the 7.72% sector average.
Since the fund was just launched in February 2023, it does not have three years of performance data yet. This lack of long-term data limits the information available to assess the fund's overall quality. However, in its brief existence, the fund has shown excellent performance, outperforming 87% of other funds in its sector over the past year.
HL Growth Fund
The HL Growth fund launched in December 2022 and is classified within the IA Mixed Investment 40-85% Shares sector alongside 221 competing funds. Over the past year, this fund ranked 32nd with returns of 12.07%, which was considerably better than the sector average of 8.48%.
Just like the HL Moderately Adventurous Managed Fund, this fund has quickly gained popularity among investors. Within its initial 18 months, it has accumulated an impressive £1.2 billion in funds under management, showcasing its appeal and success in a short timeframe.
HL Adventurous Managed Fund
Also categorised under the IA Volatility Managed sector. This fund has achieved an impressive 1 year performance with a 15.88% growth rate, securing a sector ranking of 5 out of 206 and surpassing the sector average of 7.72%. Again, this fund is from Hargreaves Lansdown's new fund range having launched in February 2023, and thus lacks long term performance data. However, the fund has delivered very strong returns over the past year and one to watch going forward.
Poor Performing Hargreaves Lansdown Funds
As identified in the performance analysis table, the vast majority of Hargreaves Lansdown funds underperformed the sector average over the periods analysed.
HL Multi-Manager Asia and Emerging Markets Fund
The HL Multi-Manager Asia and Emerging Markets fund is among their worst-performing funds. In the past year the fund only managed to return growth of 2.06%, which was significantly lower than the 8.89% sector average, ranking the fund 166th out of 229 in the IA Specialist sector.
Over three years, the fund returned negative growth of -12.04%, ranking 180 out of 211, while the sector average was 9.53%. Its 5 year performance was equally as poor, with lowly returns of 4.46% compared to the sector average of 26.63%.
HL Multi-Manager Strategic Bond Fund
Another under-performer is the HL Multi-Manager Strategic Bond fund. In the past year, it returned growth of 2.19%, which ranked a disappointing 68th out of 83 funds in the IA Sterling Strategic Bond sector. In contrast, the sector average for the period was more than double at 5.15%.
Over three years the fund returned negative growth of -6.77%, ranking 15 out of 16, compared to the sector average of 4.16%. Its five-year performance stands at 8.28%, ranking 52 out of 67, with the sector average also at 8.28%. This fund has a lower rating due to negative performance over the three-year period.
HL Multi Manager Special Situations fund
The HL Multi Manager Special Situations fund has £1.89 billion of investor assets under its management which makes it Hargreaves Lansdown largest fund. Yet despite its popularity the fund has consistently ranked among the worst performers in its sector. Classified within the highly competitive IA Global sector, the fund has been outperformed by 86% of the funds in this sector over the past 5-years with cumulative growth of 30.89% falling well below the sector average of 53.21%. When compared to the biggest and best Global funds the difference in even greater again.
Hargreaves Lansdown Charges
In their value assessment report Hargreaves Lansdown commented that all but 3 of their Multi Asset funds offered good value in relation to their costs. To provide an overview of their charges and how they compare to their sector peers we have listed the charges for each of the 18 Hargreaves Lansdown funds analysed in this report alongside the average charge of all funds within their respective sectors.
As identified in the table above, 14 of the 18 funds have an annual charge that exceeds their sector average. This analysis indicates that Hargreaves Lansdown has a higher fund charge than the majority of their competitors despite the fact that the majority of their funds have a history of underperformance.
Summary
Hargreaves Lansdown has advanced from being a fund supermarket to one of the UKs most prominent fund managers amassing some £10 billion of funds under management in their range of in-house funds.
It is clear that fund management is now an integral part of Hargreaves Lansdown's business model, with a significant proportion of their revenue coming from their own brand of funds. But as identified in this analysis, the majority of these funds have a history of poor or mediocre performance.
For many investors, the real value from Hargreaves Lansdown is likely to come through their platform/technology, where they provide access to thousands of funds, often at discounted rates, and not necessarily from the range of funds they currently manage.
Invest in Quality
With thousands of fund options available, many investors often experience disappointing returns due to underperforming funds.
At Yodelar, our portfolio development is based on years of exhaustive analysis of the fund universe and managers. We evaluate over 100 managers, tens of thousands of funds, and 30,000 model portfolios. Our ongoing research shows that only a small subset of funds and managers consistently outperform, with over 90% of portfolios containing chronic under-performers.
These data-driven findings inform our structured portfolio construction process, utilising top-tier, proven funds within each asset class based on rigorous backtesting.
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As an FCA-regulated firm, we are committed to grounding our advice in advanced analytics. Our objective is to deliver independent guidance and manage portfolios in a way that significantly boosts client returns through diligent research.
Through thorough due diligence across the global fund universe, we pinpoint elite managers who we believe are ideally suited to consistently deliver superior performance. These insights enable us to design optimised portfolios that aim to maximise clients' growth potential while adhering to specific risk parameters.
