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  • Improvements to our HL Multi-Manager funds

    We’ve made several improvements to our multi-manager funds, including reduced management charges on most of the range.

    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.

    We know it’s important to you to save and invest with confidence.

    To help, we’re focused on two things in particular – client service and investments. A great example of both is the HL Multi-Manager range.

    There are many investors who don’t have the time or inclination to build and manage a portfolio of funds. The HL Multi-Manager funds aim to provide a convenient solution for these investors, with manager selection and portfolio construction being undertaken by our team of dedicated experts.

    Each fund is a collection of what we think are the best funds available to achieve a particular objective. These are brought together in a single investment managed by our experienced team.

    When choosing funds, we look for experienced managers we can trust, so we focus on whether they have a track record of performance and their ability to achieve strong returns over the long term.

    Service and transparency

    When you invest in our funds, you’ll also receive great service and support.

    Each fund has a clear and concise factsheet, so you’ll understand how your money is invested and why.

    If you ever have a question about your investment, no matter how big or small, the Helpdesk is ready and waiting to answer your call or email.

    We’re committed to offering value for money. Today investors in the HL Multi-Manager funds are benefiting from several improvements we’ve made over the past year. We’re also reducing the ongoing charge for most of the range (see table below).

    What has changed and why?

    Over the past year we’ve made some important changes at HL Fund Managers Ltd (HLFM), the HL company that runs the HL Multi-Manager fund range.

    A new independent non-executive director and chairman, John Misselbrook, joined the board of HLFM in July 2020. 40% of the board is now independent. We’ve just published our annual Assessment of Value Report, in which you can read more details about this and other changes.

    We think the improvements we’ve already made, coupled with further work that is ongoing will help deliver better outcomes for our clients in future.

    How annual charges are changing (OCF)

    Fund Current charge (%) New Charge* (%) Change (%)
    HL Multi-Manager Asia & Emerging Markets 1.56 1.56 0.00
    HL Multi-Manager Balanced Managed 1.41 1.38 -0.03
    HL Multi-Manager Equity & Bond 1.32 1.26 -0.06
    HL Multi-Manager European 1.34 1.34 0.00
    HL Multi-Manager High Income 1.25 1.19 -0.06
    HL Multi-Manager Income & Growth 1.24 1.22 -0.02
    HL Multi-Manager Special Situations 1.48 1.46 -0.02
    HL Multi-Manager Strategic Assets 1.37 1.31 -0.06
    HL Multi-Manager Strategic Bond 1.21 1.06 -0.15
    HL Multi-Manager UK Growth 1.33 1.33 0.00

    Funds listed in alphabetical order. OCF shown is correct at 30 September 2020. The HL annual platform charge of 0.45% also applies.

    You don’t need to do anything to benefit from the lower charges. The changes will automatically apply to these funds, *no later than June 2021. We’ll update you as soon as the changes have been made.

    Why we can reduce fees

    The managers of our funds dedicate their time and resources to finding what they think are the best underlying funds to invest in. They charge an ongoing fee to investors for this service, much like a fund investing in shares or bonds directly.

    The underlying funds all have their own charge too, which means multi-manager funds cost more overall. We think this extra layer of management can prove valuable for investors who want to leave more of the hard work to the professionals.

    As a result of some changes to the way the funds are managed over the past couple of years, some costs have fallen. We’re now able to pass these savings on to our clients.

    Economies of scale

    Many of the costs of managing a fund are fixed - and don’t increase as the fund gets bigger in size. This means that larger funds benefit from economies of scale.

    For our funds that are over £1bn in size we’ve decided to pass these savings on to our clients.

    Clients will also see the benefits of the reduced trustee charges we’ve negotiated, along with lower fees on some of the funds’ underlying investments.

    ‘Segregated mandates’ are another way we’ve been able to reduce costs. Instead of buying a manager’s fund for our portfolio, in some cases we’re able to give a portion of our portfolio directly to that manager to invest within set guidelines. This is known as a segregated mandate. It gives our fund managers more control, while usually lowering costs too.

    Lower fees for investments in bonds

    The yields available in bond markets have continued to fall over the past few years, making it hard for bond funds to generate a good income for investors, so we’re reducing fees where the funds invest in bonds.

    Five funds will benefit from this change, with the charge falling as low as 0.6%, from 0.75%. We’re applying a sliding scale based on how much each fund is invested in bonds. Our management charge for funds that only invest in shares will stay at 0.75% per year.

    As usual this charge is added to the charges of underlying funds to make the multi-manager fund’s ongoing charge (as shown in the table above).

    Our commitment to transparency

    It’s important you understand how your money is managed, at a level of detail you’re comfortable with.

    As well as more detail on the changes outlined above, our Assessment of Value Report also contains an in-depth look at the performance, costs and quality of our fund range.

    As always, we’ll keep you informed about your investments, and if anything important changes you’ll be the first to know.

    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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