Hargreaves Lansdown Group  

How Hargreaves overhauled its buy list after Woodford woes

Hargreaves admitted that while its selection of funds in the global sector had done well against their peers, on average they had fallen short of global market index and tracker funds, and put this down to the fact the performance of global funds was determined by their US exposure.

As many active funds considered US equities too expensive, this hurt their performance in comparison to the index.

Who made the cut?

Some 68 funds feature on the new shortlist from Hargreaves, including the Jupiter Global Value Equity fund, the Artemis High Income fund, Baillie Gifford’s American portfolio, the Invesco Tactical Bond mandate, Marlborough Multi-Cap Income, Liontrust’s UK Growth, and the L&G UK Mid-Cap tracker.

A total of seven funds have been removed from the shortlist since July last year.

Lindsell Train’s UK and Global Equity funds were removed from the best buy picks as Hargreaves felt the two funds held too large a stake in Hargreaves Lansdown itself to appear on its lists.

The Sanditon European fund was axed when Chris Rice stepped down as manager in October last year and the M&G Recovery fund (once the biggest fund in the IA universe) was removed after Hargreaves announced a loss of conviction in manager Tom Dobell.

It removed Marlborough’s Nano-Cap Growth in a bid to keep the fund at a reasonable size while the BNY Mellon Global Income fund was removed when manager Nick Clay left the company.

Most recently, in early May, Hargreaves ditched the Royal London Sterling Extra Yield Bond fund as it believed the fund “should remain at a size which allows the managers to make the most of the opportunities presented to them”.

Fundsmith Equity, managed by star manager Terry Smith, has famously never made Hargreaves' best buy lists despite being among one of the best performing funds in the IA Global sector, and this has not changed with the launch of its new, overhauled shortlist.

Mr Smith said: “We note the reasons put forward for Hargreaves Lansdown’s continued failure to include Fundsmith in the 'best buy' list. They cite our unwillingness to disclose our portfolio positions to them more frequently than we do to our other investors.

“Moreover, given the poor track record of Hargreaves Lansdown’s best buy lists and the fate of some other funds they have recommended, we would worry if we were included.”

imogen.tew@ft.com

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