Multi-asset direction must be the next step for FX as Hargreaves Lansdown introduces new fund

Hargreaves Lansdown is Britain’s largest retail financial services firm in any sector, its size and client base surpassing that of all sectors from electronic trading to pensions and mortgages.

Based in Bristol rather than nestling among giants of the world-leading financial services and fintech epicenter that is London, Hargreaves Lansdown grew from its origins as an insurance brokerage founded by an accountant and a computer salesman in 1982 to a vast publicly listed Goliath, with its own trading and portfolio management infrastructure called “Vantage”, and led by former IG Group CFO Chris Hill who presides as CEO.

Today, Hargreaves Lansdown, whose Vantage system allows retail investors and traders to manage their accounts from endowments and ISAs to FX and CFD trading in one place, has launched a product which is aimed squarely at the self-directed retail investor.

HL Markets, Hargreaves Lansdown’s CFD and FX moniker is a white label of IG Group’s offering, wrapped into Hargreaves’ highly sophisticated proprietary infrastructure.

The company, which has £85.9 billion assets under administration all from direct retail customers, has unveiled a global equity fund, to sit alongside its existing UK growth and UK income funds under the ‘HL Select’ banner.

The HL Select Global Growth Shares scours the world’s major stock markets for the best investment opportunities for the long term and will be managed by the same team as the other ‘HL Select’ funds, led by Steve Clayton, the company’s head of equity research.

The portfolio, which launches on 3 May at £1 fixed launch price, primarily targets capital growth over the longer term. However, the investment team expects the fund to pay a dividend – although no income goals have been set. It will typically consist of 30 to 40 names, sit in the Investment Association’s Global sector and be benchmarked against the FTSE All-World index – but will not consider the make-up of the index when it comes to portfolio construction.

The HL Select Global Growth Shares fund will have an ongoing charge of 0.6 per cent and is exclusive to the platform that levies admin charges of 0.45 per cent each year and clients will need to deposit £100 upfront or £25 per month to invest in the fund.

Mr Clayton this morning explained to mainstream press in London ‘Investing globally opens up new opportunities to find truly exceptional companies from a much bigger pool of choice. We try to identify great businesses, wherever they are in the world, with strong balance sheets, and own them for the long term. We look for businesses that are in charge of their own destiny, which will grow through thick and thin, regardless of issues like Brexit.”

“By taking a wary attitude to debt, we hope to shield investors from the worst of any future downturns, while capitalising on the upswings.”

Being equipped to offer a range of self-directed investments is vital in today’s electronic trading environment, and this is where the large firms with their own trading infrastructure demonstrate a clear advantage over those hampered by a limited product range which is not controllable by the firm itself due to its white label MT4 nature.

During a meeting with senior executive Danny Cox at Hargreaves Lansdown’s head office in 2015, FinanceFeeds looked at the firm’s proprietary infrastructure and ownership of its service based relationship with its clients.

Mr Cox explained hat Hargreaves Lansdown’s customer base is largely concentrated in Britain, and the company provides specific service level parameters with regard to its service. He further explained that the company has a non-automated telephone menu, and a help desk at the company’s Bristol headquarters with response times in less than 10 seconds.

There has been for some time a necessity of providing multi-asset solutions, and the ability to offer low-deposit access to investment fund markets to retail domestic market customers is a route to sustainability and investor empowerment that we should take seriously.

Featured image: Clifton Suspension Bridge, Bristol England