Britain’s biggest broker cuts popular names from fund recommendation list
Hargreaves Lansdown has cut 27 funds worth almost £70bn from its recommendation list, with several popular managers failing to make the grade.
Before the reshuffle, almost half of all assets invested through the fund shop were held in funds on its Wealth 150 or Wealth 150+ best-buy lists. The two were similar, although the latter focused on funds that have lower fees.
The lists have been combined and condensed to create the Wealth 50. The name is slightly misleading as there are 60 names on the list made up of 50 active and 10 passive funds.
Investors will get, on average, a 30pc discount on fund fees from those on the list, Hargreaves Lansdown said.
Mark Dampier, the firm’s research director, said: “We have fought tooth and nail to get prices down. We would be short-changing everyone if we accepted a higher-priced fund – those that have given me the lower price would think they could get on the list without offering a discount. ”
Of the funds removed as part of the relaunch, Richard Woolnough’s £21bn M&G Optimal Income fund is the largest. A number of other wellknown names have lost out: Merian’s Richard Buxton and Richard Watts, Jupiter’s Alexander Darwall, Fidelity’s Alex Wright and BlackRock gold expert Evy Hambro were all missed off
Funds with specialisms such as technology or oil are unlikely to make the list from now on, Mr Dampier said. There are also no investment trusts, listed funds that trade on the stock market, as investors cannot trade them as easily as funds.
Three new funds were added to the list: Jacob de Tusch-Lec’s £3.9bn Artemis Global Income fund, the £880m Aviva Investors UK Equity Income fund and the £63m Unicorn Outstanding British Companies fund run by Chris Hutchinson, by far the smallest fund on the list.
A surprise to some will be the inclusion of the Woodford. Equity Income fund, run by struggling manager Neil Woodford. Investors have been pulling their money from the fund as it has been one of the worst performing UK income portfolios in each of the past three years.
However, Mr Dampier said that he remained willing to back the manager, albeit with some concerns.
“We agonise over people like Woodford all the time,” he said, before adding that managers included on the list are there for the long term and should be backed even when going through difficult periods.
Mr Dampier added that Mr Woodford has been through two worse periods in his investment career than the current slump, and has come out of the other side.
“I could be spectacularly wrong this time,” he warned.
Renowned investor Terry Smith’s highly successful funds have never been on the lists. Hargreaves said this was not because Mr Smith did not offer a discount, but because similar funds were available that carry a lower fee.
Under-fire manager Neil Woodford survived Hargreaves Lansdown’s cull