Our Investment Strategy
Important information - The value of this fund can fall as well as rise so you could get back less than you invested, especially over the short term. The information shown is not personal advice, if you are at all unsure of the suitability of an investment for your circumstances please contact us for personal advice. The HL Select UK Growth Shares Fund is managed by our sister company HL Fund Managers Ltd.
Companies in charge of their own destiny
We believe businesses with exceptional products and services can create a virtuous circle of customer loyalty, pricing power and financial strength that allows them to prosper and grow whichever way the economic winds are blowing.
The characteristics we look for can become self-reinforcing, giving companies the power to reinvest back into the business, stay at the forefront of their industries and continue to grow year after year. That can make a big difference to their value over the long term.
We focus on quality businesses with robust balance sheets and durable profits.
What we look for in companies
The potential for long-term durable growth is our main objective. Not every holding will tick each box but most of the companies we invest in will share many of these characteristics:
Exceptional products and services
We want to invest in businesses that have an edge over their rivals - perhaps a brand, or intellectual property - that customers can’t find elsewhere.
When customers keep coming back, it's easier to generate good returns.
We believe high profit margins indicate the strength of the company’s offering. High margins are not earned by accident.
A high return on capital allows a business to fund its own growth.
Businesses have to keep reinvesting to stay in contention. Strong cash flow gives the freedom to do this, without sacrificing financial strength.
Little or no debt
We prefer businesses to be strong enough to sail through choppy waters, even when it looks like a mill pond out there. Too much debt can leave a company exposed in a downturn, whereas the financially strong can take advantage of opportunities in the upturn.
Forward thinking management
Digital technologies are impacting every sector of the global economy. To stay on top of the game, company managers need to be planning far ahead. We look to back the managers with the vision to lead their industries.
Every stock should count
We choose stocks on merit, not mass. We hold around just 30 large, medium and higher risk smaller companies. This means each holding can make a real difference to performance, although it is a higher risk approach.
In the near term, markets can be unpredictable. But the long term is often surprisingly clear. Trends like ageing populations or the growth of e-commerce play out over long periods of time. We try to find businesses on the right side of these trends and hold them for years.
We don't mind paying the right price for quality, because great companies can compound their earnings, far out into the future.
Meet the Fund Managers
Steve Clayton, Fund Manager
Steve started working in the City in 1987, after gaining an economics degree from the University of Cambridge, and has worked in the stock market ever since. Early experience at Royal Life, NPI and Halifax eventually led to a Partnership at Mirabaud Securities LLP. That move saw Steve switch from running institutional portfolios to providing leading fund managers in the UK, Switzerland and North America with advice on stock selection and strategy. Steve joined Hargreaves Lansdown in 2014 to provide equity research to our clients and create the HL Select UK Growth Shares Fund range.
Charlie Huggins, Fund Manager
After gaining a First in Biochemistry at the University of Oxford, Charlie joined Hargreaves Lansdown in 2011. Working within the Investment Research team, Charlie has focused on equity research and investment management, gaining his CFA charter along the way. Since Steve Clayton joined HL in 2014, Charlie has worked with Steve to develop HL’s equity fund management capabilities.
Learn what we buy and sell in the fund, along with our latest thoughts on what we hold and the market when it matters most.