Performance Analysis
This fund is a relatively new addition to our Multi-Manager range. However, it's now thirteen years since the managers of this new fund launched our HL Multi-Manager Income & Growth Trust with the aim of providing a good level of dividend income and capital growth from the UK stock market. The fund has performed well since launch, although please remember past performance is not a guide to the future, and the process for identifying high-calibre fund managers will be virtually identical on the new fund.
However, the HL Multi-Manager High Income Fund's objectives will be significantly different, prioritising a higher level of income, and as a new proposition it will not perform in the same way.
Investment Philosophy
Lee Gardhouse and Ellen Powley will look across the entire investment spectrum to identify which areas they feel offer the most attractive yields. Importantly, they will also take into consideration the sustainability and security of the income on offer, rather than targeting only the highest yielding areas of the market, which could put capital at undue risk and ultimately result in disappointment.
By blending different types of funds, constantly reviewing the portfolio, and moving between different areas of the market when more attractive opportunities emerge, they aim to deliver an impressive high income, which has the potential to grow over the long-term. This means that it will not have the same guarantee of capital as a deposit account.
Process and Portfolio Construction
The portfolio has initially been constructed with approximately 60% invested in shares and 40% invested in bonds.
This approach aims to offer the best of both worlds in a single portfolio. It offers the benefits of potential capital and income growth from a selection of the best equity income funds available, plus long-term income and lower volatility from a selection of the manager's favourite bond funds.
To help choose funds to be included in our multi-manager portfolios a proprietary analysis tool covering in excess of 2,000 funds and fund managers has been developed. This tool enables us to understand why a fund performs as it does with the aim of identifying fund managers able to add value within their areas of the market. It is used to shortlist funds worthy of further consideration in the form of face-to-face meetings. These meetings explore a multitude of aspects regarding the fund and its manager including people, process, philosophy, portfolio construction and incentivisation. These meetings allow the team to gain a deep understanding of each fund and this aids the managers in compiling a portfolio which has a balance of manager styles.
The fund is highly flexible and the managers are able to invest in higher-risk emerging market debt and other income producing assets such as property and infrastructure if they see attractive opportunities.
Please note charges can be taken from capital which can increase the yield but reduces the potential for capital growth.