Hargreaves swipes at 'black art' fund managers

Hargreaves swipes at 'black art' fund managers

Hargreaves Lansdown has launched a range of direct-to-consumer low-cost equity funds designed to throw light on a "black art, understood by the few". 

The financial services company said the new offerings would have a lower investor entry point at £25 per month or £100 as a lump sum and that they would aim "to give investors an unrivaled level of communication between fund manager and their investors".

Debuting will be the HL Select UK Shares fund that will begin trading on 1 December this year and will be tagged at a £1 fixed launch price and will have an ongoing charge of 0.6%. 

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Lee Gardhouse, chief investment officer at Hargreaves Lansdown, said traditional discretionary managed share portfolios are often expensive, have high minimum investment requirements and are difficult to compare on performance.

"We are aiming to provide a new type of investor experience by offering access to an expertly managed portfolio of shares, in the convenience of a fund, with a new level of investor information and insight.”

Investors will have access to the trading status of the funds via blog posts and email notifications.

Steve Clayton, HL Select UK shares fund manager at Hargreaves Lansdown, said: “Investing shouldn’t be a black art, understood by the few, nor should it be a black box, where you just take what you’re given without understanding why.

"We want our investors to really understand what is happening to their money, and why their fund manager bought and sold the stocks they did.

"HL Select UK shares investors will be told why we hold the shares we do. And when we change the portfolio, we’ll explain what’s moved in and out, and why we did it."

"In true HL fashion, we’re going to offer investors a lot more, for a lot less than the cost of the average fund.”

But Kusal Ariyawansa, financial planner at Manchester-based Appleton Gerrard in Manchester said 0.6 per cent for a select number of UK shares is "costly given a lack of track record" in addition to the availability of low cost passives and multi-asset funds.

"Would I, as an investor, be happy to pay extra to receive an unrivaled level of communication from the fund manager? I'd rather receive the best returns, thanks, as I'm not too familiar with the "black art" [Hargreaves Lansdown] speaks of . . . as long as it looks good I'll hang it up.

"An artists communication is not going to persuade me that the artwork will suit my house!"