HL Growth Fund Performance Update – Second Quarter of 2025
In this update, we look back at key events impacting the stock market, and how the HL Growth Fund performed between 1 April and 30 June 2025, as well as over longer time periods.

Last Updated: 7 August 2025
The HL Growth Fund is our “default fund” for workplace pensions. That means it’s likely to be where your monthly pension contributions are invested if you haven’t made your own investment decisions.
If you’d like to know more, visit our website.
Remember that investing is for the long term, and your pension is typically invested over many years or even decades. You shouldn’t base your investment decisions on short-term events.
This update will help you understand how the stock markets affect the value of your pension investments. Past performance is not a guide to the future. This is not personal advice, please ask for advice if you are unsure of a course of action for your circumstances.
Quarter review - 1 April to 30 June 2025
Stock markets kicked off the second quarter reeling from Donald Trump’s “Liberation Day” tariffs, announced on 2nd April. Markets tumbled over the following week as investors braced for an all-out trade war, stoked by tough talk from the USA and their major trading partners including China and the EU. The US stock market suffered the worst of the losses – falling well over 10% at one point.
With just hours to go until the tariffs were due to come into effect on 9th April, Trump announced a 90-day pause on the most punitive tariff rates, allowing time for negotiations. This set the scene for a gradual market recovery which, although mired by geopolitical setbacks along the way, saw global stocks end the quarter higher than they started.
Despite the early drama, the HL Growth Fund rose in value by 5.5%* over the second quarter of the year. Over the period since the fund launched on 15 December 2021, the fund has grown by 17.3%.
To assess the fund’s performance, we benchmark it for comparison purposes against a group of funds with a similar investment mix, represented by the “IA Mixed Investment 40-85% Shares Sector”. Funds in this sector delivered an average return of 3.9% over the second quarter. Since the fund launched, it has outperformed the peer group in 9 out of 10 calendar year quarters, and by 7.6% overall.
The HL Growth Fund invests into a mix of two asset types: shares and bonds. Shares are higher risk but offer greater potential returns over the long term. Bonds tend to experience less ups and downs but generally offer lower long-term returns.
The HL Growth Fund
Despite the shaky start, shares in US companies performed the strongest of any of our investments over the second quarter. As the largest regional exposure, US companies contributed the most to the fund’s overall return. Globally, investors breathed a sigh of relief as trade dispute fears dissipated. This created the conditions for every fund holding in the HL Growth Fund to make a positive contribution to total returns. Honourable mentions go to the European, UK and global smaller companies’ sectors which also performed very well.
Let’s take a closer look at how different investments within the fund performed.
Stock markets
To diversify, the HL Growth Fund invests globally, including in higher risk emerging markets and global smaller companies. So how overseas stock markets perform is significant for the fund. The fund invests a relatively high amount in the UK market too.
This quarter, after a brief spell of weaker performance earlier in the year, technology stocks were back to being top dog. They delivered impressive growth of over 16% in the three months to the end of June, ahead of any other segment of the market. Energy stocks were a notable laggard, falling by almost 10% in response to both the tariff developments early in the period, and to the easing of tensions in the middle east later, which both weighed on the oil price. As technology is a much greater part of the global stock market, its growth more than offset the weakness in energy, allowing markets to power on.
It wasn’t just holders of American shares who enjoyed the rebound. The market rally was felt globally, with European, UK, Japanese and Emerging Market shares all rising sharply. European stocks were a standout performer too. With huge spending announcements by Germany and a general sentiment needing to shift from economic and defensive reliance on the USA to greater independence, investors in Europe had reason to cheer. And in Emerging Markets, strong performance from various countries across the developing world, from Peru to Greece to Korea, all contributing to strong gains from the higher risk holdings within the HL Growth Fund.
Back in Blighty, markets also performed well. Smaller and mid-sized companies outperformed larger ones, buoyed by an interest rate cut in May which signals better conditions for domestic focused business.
None of the investments we hold in the HL Growth Fund to gain stock market exposure lost money over the second quarter.
Bond markets
Bond returns are generally less volatile than the ups and downs of investing in shares and perform well at different times too. So the HL Growth Fund has an allocation to bonds to dampen some of the risks of investing.
Over the quarter, bonds played their usual role in providing portfolio stability. Given the very favourable backdrop of stock markets enjoying a rally, fears of a global recession falling and interest rates being cut in many countries, all the bond holdings in the HL Growth Fund gained in value.
As investors fears faded away, high yield bonds – those which give potentially higher returns, with less certainty of future performance – performed the strongest as investors sought out risky assets.
The UK government’s bonds – “Gilts” – also gained in value as interest rates fell. But bonds with longer maturities – those which won’t be paid back for many years – struggled to keep pace with those with shorter maturities. This tells us that investors are nervous over the longer-term prospects for the UK economy.
Looking ahead
As we move into the second half of the year, investors attention will remain on whether the tariff landscape feeds through into inflationary pressure, which could spell trouble for the global economy.
So far, despite some limited upward moves in the prices of goods most vulnerable to tariff-induced price rises, inflation remains broadly in check. By the end of June, US inflation had crept up only marginally, while inflation in the UK, Eurozone, Japan and China remained flat or fell. That’s good news.
Investors learnt in recent days that the EU has finally reached a trade deal with the USA, reducing tariffs from the 30% originally threatened to 15%. This should also remove some of the uncertainty and help to keep confidence high.
Despite reasons to be optimistic, investors still face challenges. Not least that markets remain heavily concentrated, reliant on the largest stocks (mostly big tech companies) to make or break the performance of the whole market. The HL Growth Fund remains diversified geographically and across different asset types, to navigate the months ahead.
3 Months | 6 Months | 1 Year | 3 Years | 5 Years | Since Launch* | |
---|---|---|---|---|---|---|
HL Growth Fund | 5.5% | 1.5% | 7.1% | 33.4% | N/A | 17.3% |
Comparator | 3.9% | 2.6% | 5.5% | 22.0% | 33.1% | 9.7% |
June 20 To June 21 | June 21 To June 22 | June 22 To June 23 | June 23 To June 24 | June 24 To June 25 | ||
HL Growth Fund | N/A* | N/A* | 7.7% | 15.7% | 7.1% | |
Comparator | 17.4% | -7.1% | 3.4% | 11.8% | 5.5% |
Past performance is not a guide to the future. The comparator is the IA Mixed Investment 40-85% Shares NR
*The HL Growth Fund launched on 15 December 2021. N/A means full year figures are unavailable. Source: Lipper IM, to 30 June 2025.
Unless stated otherwise, figures are expressed in GBP terms, to show the returns experienced from the perspective of a UK investor.
Important notes
Investing for longer increases the likelihood of positive returns. Over a period of five years or more, investments usually give you a higher return compared to cash savings. But investments can go down as well as up in value, so you could get back less than you put in.
Once invested in a pension, your money is usually no longer accessible until at least age 55, rising to 57 in 2028.
The HL Growth Fund is managed by Hargreaves Lansdown Fund Managers Ltd, a subsidiary of Hargreaves Lansdown Ltd.