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  • HL Multi-Manager – tales from our teenagers

    We look under the hood of the funds we’ve been managing the longest.

    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

    Happy birthday to our Hargreaves Lansdown Multi-Manager Equity & Bond fund which turned 13 last month.

    A lot has happened over the past 13 years. When Equity & Bond launched, Facebook was still a social media site purely for US university students, the iPhone had not yet been launched, interest rates were more than 4% and Tony Blair was enjoying his third term as UK Prime Minister.

    But through technological, political and economic change Equity & Bond has survived and thrived. If you had invested in HL Multi-Manager Equity & Bond at launch in June 2006 you’d now be looking at a return of 79% – beating the sector average by more than 10%*. Past performance isn’t a guide to the future and all investments can fall as well as rise in value, so you could get back less than you invest.

    That’s not to say performance hasn’t been challenging at times. Over the past year, the fund has lost 2.18%, where the sector has gained 3.01%*.

    Underperformance over the past 12 months is in part due to both UK stocks and sterling investment grade corporate bonds struggling. Global markets have also been a mixed bag, with Japan and Europe struggling, although Asian stocks did well. The portfolio managers’ pick of Jupiter Asian Income did particularly well.

    Earlier this year, the portfolio managers swapped the Kames Investment Grade Bond fund for Morgan Stanley Sterling Corporate Bond, after fund manager Stephen Snowden quit Kames to join Artemis. They also exchanged their position in Ben Whitmore’s Jupiter Income fund for a segregated mandate run especially for us by Whitmore. The fund can also invest in higher-risk high-yield bonds.

    Long-term performance remains compelling and this newly minted teenager provides a good investment option for a one-stop shop' for equity and bond exposure.

    Scroll across to see the full table.

    Annual percentage growth
    Jun 14 -
    Jun 15
    Jun 15 -
    Jun 16
    Jun 16 -
    Jun 17
    Jun 17 -
    Jun 18
    Jun 18 -
    Jun 19
    HL Multi-Manager Equity & Bond 7.72% 0.07% 15.28% 0.62% -2.18%
    IA Mixed Investment 20-60% Shares 4.63% 2.11% 12.02% 2.54% 3.01%
    HL Multi-Manager Special Situations Trust Acc 11.88% 0.93% 29.34% 7.02% 0.50%
    IA Global 9.49% 7.65% 24.12% 9.41% 7.33%

    Past performance is not a guide to the future. Source: Lipper IM*, correct as at 30/6/2019.

    MORE on this fund, INCLUDING CHARGES

    HL Multi-Manager Equity & Bond KEY INVESTOR INFORMATION

    How are the other funds faring?

    Equity & Bond is not the only long-term legend in the Multi-Manager fund suite, the HL Multi-Manager Special Situations was launched in April 2001.

    This fund is the purest expression of our investment team's extensive research, providing a one-stop-shop of their favourite fund managers across the globe. It seeks to produce capital growth over the long term. It has now clocked up returns of 265%, more than tripling investors’ money. The sector average over that time period is up 174%* over the same time period. This isn’t a guide to how the fund will perform in future.

    Recent performance hasn’t been as strong as the fund’s long-term record, in large part because the US stock market has dominated other global ones, particularly our home UK market. The fund has long held a bias to UK equities, where the managers find a number of exceptional funds.

    At some stage, they believe this gulf in performance between US shares and those listed in other countries will unwind, which should prove helpful for HL Multi-Manager Special Situations. The fund can also invest in smaller companies and emerging markets, both of which add risk.

    In February, the managers sold their holding in J O Hambro Japan Dividend Growth and spread the proceeds across a number of funds in the portfolio. To retain their exposure to Japanese equities, they added to Man GLG Japan CoreAlpha, Jupiter Global Value Equity and Lindsell Train Global Equity. The latter two global funds have close to 20% weights in Japanese companies.

    They also exchanged their positions in Franklin UK Mid Cap and Franklin UK Smaller Companies for a segregated mandate run by Paul Spencer. The mandate has more flexibility than Spencer's existing Franklin UK Mid Cap fund, where he can only own businesses listed on the FTSE Mid-250 index.

    The mandate allows him to own companies listed outside this index, in up to 30% of the portfolio. We believe this additional flexibility will benefit Spencer because he can run his winners into the FTSE 100, invest in companies of a mid-cap size that are not constituents of the official index as well as invest in those smaller companies that represent mid-caps of the future.

    We think the benefits of a multi-manager approach, including the extra layer of management and diversification, justify the extra costs involved.

    MORE on this fund, INCLUDING CHARGES

    HL Multi-Manager Special Situations KEY INVESTOR INFORMATION

    Multi-Manager investment in Woodford Equity Income

    On 3 June the Woodford Equity Income Fund suspended dealing. Woodford Equity Income is held in a number of our Multi-Manager funds, Equity & Bond has a portfolio position of 6.92%, while Special Situations has 4.57% in the fund.

    It is held across six of our Multi Manager portfolios – Balanced Managed, Special Situations, Income & Growth, Equity & Bond, UK Growth and Strategic Assets. The weighting in these portfolios varies dependent on the portfolio. Please see the fund factsheets for more details.

    At the time of writing Woodford Equity Income remains suspended. However, because we operate a highly diversified portfolio, the Hargreaves Lansdown Multi-Manager funds are operating as normal.

    We will continue with our analysis of the Woodford Equity Income fund and will let our clients know more as soon as we have a definitive date regarding the fund suspension being lifted. As always we’re determined to deliver the best long-term outcomes for investors in our Multi-Manager funds.

    The HL Multi-Manager fund range is managed by our sister company HL Fund Managers Ltd.

    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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