Hargreaves Lansdown launches “ready-made” index portfolio funds

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Hargreaves Lansdown one of the UK’s largest stockbrokers and investment platforms is launching a new range of four “ready-made” index portfolio funds. The funds will invest using the firm’s active asset allocation methodology, applied to a portfolio of index funds and ETFs selected by BlackRock, one of the world’s largest index investors.

Hargreaves Lansdown is introducing the multi-asset index portfolio funds in response to a growing demand for index investing from its client base which has increased by 80% over the last two years according to the Bristol-based broker.

HL Ready Made Index Funds

The new index funds will be available from June 6th and will complement the firm’s existing HL-managed ready-made fund range that was launched in 2023.

The four new Hargreaves Lansdown index funds are ranked by risk from most potentially profitable to least:

  1. HL Multi-Index Adventurous – asset allocation typically 100% shares – aiming for 90-110% volatility of global equity markets.
  2. HL Multi-Index Moderately Adventurous – asset allocation typically 80/20 split between shares and bonds – aiming for 70–90% volatility of global equity markets.
  3. HL Multi-Index Balanced – asset allocation typically 60/40 split between shares and bonds – aiming for 50-70% volatility of global equity markets.
  4. HL Multi-Index Cautious – asset allocation typically 30/70 split between shares and bonds – aiming for 30-50% volatility of global equity markets.

Hargreaves Lansdown CIO, Toby Vaughan said:

“HL clients’ investment in index funds has risen by more than two and a half times over the last 7-years, and the number of clients holding index funds as their main investment has increased by 80% over the last 2 years.”

“Our new ready-made multi-index investment portfolios add further choice for investors to meet that demand and are an easy cost-efficient solution for those looking to get started with investing.“

He added that

“They are part of our evolving strategy, which aims to expand and improve the range of investment options we provide to clients at all stages of their investment journey, from beginners to highly experienced investors.”

A move towards managed investments

Robo-advisors or digital wealth managers are becoming more and more popular as new investors enter the stock market in search of better returns. However, as HL has traditionally been a DIY investing platform, some investors may have been put off by having to choose their own investments. With that in mind the HL Index funds aim to be:

  • Straightforward – investors can choose from either an active or index all-in-one portfolios
  • Managed – there is no need to pick investments as expert fund managers make investment decisions
  • Diversified – you can gain exposure to a range of investment styles and approaches in global investments.
  • Rebalanced – the investment managers update portfolios to stay on track and stay aligned to the chosen level of risk.
  • Clarity – it is possible to view investment performance, online or via the Hargreaves Lansdown app 24/7.

A balancing act

Hargreaves Lansdown built its reputation and its business by being a platform, offering third-party products and low-cost brokerage services to retail investors.

One can see why the firm, which has more than 2.0 million active investment accounts and £142.0 billion of assets under administration wants to offer more in-house products to its end customers, rather than just be a re-seller of and portal for other firms’ funds and services.

However, it must not lose sight of the values and business model that built the firm in the first place. Not least because its 40% share of the UK investing platform market makes it the number one target for its competitors.

Hargreaves Lansdown Index Fund Investing Review
Hargreaves Lansdown

Name: Hargreaves Lansdown Index Fund Investing

Description: To make index fund investing easy Hargreaves Lansdown analysts have selected a number of index funds from across the major sectors for the Wealth Shortlist.
Capital at risk.

Is Hargreaves Lansdown good for index funds?

Yes, Hargreaves Lansdown has around 280 index funds in their screener (excluding ETFs). HL also have what they call a “Wealth Shortlist” where their experts have curated a best buy list of index funds across a broad range of sectors to help investors build a diverse portfolio.

A good choice for those who want to include index funds as part of their overall portfolio. However, it can get expensive for large index fund portfolios.


Fees: *There is no charge for buying and selling funds. Fund accounts are charged at 0.45% for the first £250,000. Then 0.25% up to £1m, 0.1% up to £2m. There is no charge above £2m.

Pros

  • £1 minimum deposit
  • Account fees from 0.45%*

Cons

  • No cap on fund fees
  • Pricing
    (3.5)
  • Market Access
    (4.5)
  • Online Platform
    (4)
  • Customer Service
    (4)
  • Research & Analysis
    (4)
Overall
4
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