2nd March 2014
Hargreaves Lansdown has cut the price of investing in many funds by 24% claiming that on a typical portfolio of £30,000 an investor will be nearly £1,000 better off after 10 years. The new pricing structure came into force on March 1.
The firm says it has brought down the charges on its W150+ range, the smaller, cheaper range, to an average of just 0.54% compared to the standard unbundled price of 0.71%. It says this represents a 24% average saving from the standard unbundled price. For the wider Wealth 150, fund costs have been reduced to an average of 0.66%, compared to the standard unbundled price of 0.75%.
Mark Dampier, head of investment research, Hargreaves Lansdown says: “Our investment team devotes over 30,000 hours a year to researching fund managers to identify the best in the market. The core investment principles which underpin our research process ensure that only the best funds make it onto the Wealth 150 and Wealth 150+.”
Danny Cox, Hargreaves Lansdown says: “We have slashed the cost of investing by a quarter. On a typical portfolio (£30,000) an investor will be nearly £1,000 better off after 10 years. We have used this regulatory change to put the squeeze on fund manager pricing and lead competition in the market. We were one of the pioneers of discount broking back in the 1990s and Hargreaves Lansdown clients continue to benefit from our willingness to fight for the best possible deals from fund groups on their behalf.”
The Wealth 150 is currently 90 funds and the Wealth 150+ is currently 27 funds. The firm has also put together several tables to demonstrate the changes.
Total Expense Ratio (TER) cost example, comparing the benefit of today’s new discounts with the standard investment charges on a typical portfolio.
|Amount||Fund||HLTER||Annual cost||Standard TER||Annual cost|
|£ 3,000||First State Asia Pacific Leaders||0.86%||£ 25.80||0.91%||£ 27.30|
|£ 4,500||GLG Japan CoreAlpha||0.81%||£ 36.45||1.05%||£ 47.25|
|£ 4,500||Marlborough UK Micro-Cap Growth||0.62%||£ 27.90||1.52%||£ 68.40|
|£ 3,000||Newton Emerging Income||0.73%||£ 21.90||0.93%||£ 27.90|
|£ 6,000||Old Mutual UK Alpha||0.75%||£ 45.00||0.85%||£ 51.00|
|£ 4,500||Standard Life Inv UK Smaller Companies||0.77%||£ 34.65||1.00%||£ 45.00|
|£ 4,500||Threadneedle European Select||0.72%||£ 32.40||1.05%||£ 47.25|
|£ 30,000||Annual Fund cost||0.75%||£ 224.10||1.04%||£ 314.10|
Hargreaves Lansdown offers a combination of competitive charges, access to the best range of low-cost funds, seamless administration and award-winning research. HL Vantage now offers 2,000 unbundled and 2,400 inclusive funds, plus around a further 10,000 investment options: shares, investment trusts, ETFs, ETCs, corporate bonds and gilts.
Full list of the 27 funds on the Wealth 150 + with AMCs, TERs and HL discounts
|Standard AMC||HL AMC||HL Saving||Standard TER||HL TER||HL Saving|
|Aberdeen Latin American Equity||1||0.6||0.40||1.25||0.85||0.40|
|Artemis Strategic Assets||0.75||0.66||0.09||0.84||0.75||0.09|
|Artemis Strategic Bond||0.5||0.41||0.09||0.58||0.49||0.09|
|AXA Fram Managed Balanced||0.625||0.5||0.125||0.685||0.56||0.13|
|Fidelity Moneybuilder Income||0.4||0.3||0.10||0.56||0.46||0.10|
|First State Asia Pacific Leaders||0.85||0.8||0.05||0.91||0.86||0.05|
|GLG Japan CoreAlpha||0.75||0.65||0.10||0.91||0.81||0.10|
|Invesco Perpetual Tactical Bond||0.625||0.45||0.175||0.73||0.63||0.10|
|Lindsell Train Global Equity||0.65||0.45||0.20||0.84||0.64||0.20|
|Lindsell Train UK Equity||0.65||0.45||0.20||0.79||0.59||0.20|
|Marlborough Multi Cap Income||0.75||0.6||0.15||0.77||0.62||0.15|
|Marlborough UK Micro Cap Gwth||0.75||0.7||0.05||0.79||0.72||0.07|
|Morgan Stanley £ Corp Bond||0.4||0.15||0.25||0.47||0.22||0.25|
|Newton Asian Income||0.75||0.62||0.13||0.84||0.71||0.13|
|Newton Emerging Income||0.75||0.55||0.20||0.93||0.73||0.20|
|Newton Global Higher Income||0.75||0.62||0.13||0.81||0.68||0.13|
|Newton Real Return||0.75||0.62||0.13||0.79||0.66||0.13|
|Old Mutual UK Alpha||0.75||0.65||0.10||0.85||0.75||0.10|
|Royal London £ Extra Yield Bond||0.75||0.32||0.43||0.88||0.45||0.43|
|Schroder Managed Balanced||0.5||0.3||0.20||0.63||0.43||0.20|
|SLI UK Smaller Companies||0.85||0.65||0.20||0.97||0.77||0.20|
|Threadneedle European Select||0.75||0.65||0.10||0.94||0.72||0.22|
|Threadneedle UK Equity Income||0.75||0.65||0.10||0.86||0.69||0.17|
The firm has also issued a list of its core tracker funds
Fund AMC TER
BlackRock Continental European Equity Tracker 0.10% 0.12%
BlackRock Corporate Bond Tracker 0.10% 0.12%
BlackRock Emerging Markets Equity Tracker 0.18% 0.25%
BlackRock Japan Equity Tracker 0.10% 0.12%
BlackRock Pacific ex Japan Equity Tracker 0.10% 0.15%
Legal & General All Stocks Gilt Index Trust 0.07% 0.10%
Legal & General All Stocks Index-Linked Gilt Index 0.07% 0.10%
Legal & General Global Inflation Linked Bond Index 0.10% 0.15%
Legal & General International Index Trust 0.14% 0.20%
Legal & General UK 100 Index Trust 0.06% 0.10%
Legal & General UK Index 0.08% 0.10%
Legal & General US Index 0.09% 0.12%
Hargreaves Lansdown says it has embraced 10 core principles of the Wealth 150 which we have also included below.
1. To help investors choose funds which will outperform their peers over the long term.
2. The Wealth 150 is investment and research led.
3. We select active funds based on their prospective, total return performance. We use specialist quantitative and qualitative analysis to do so.
4. We judge prospective performance on investment skill first and price second.
5. Only members of the fund management and research team can recommend a fund is added or removed.
6. We don’t include average funds at a cheap price.
7. We never guarantee a fund a place on the Wealth 150, performance and terms are reviewed constantly.
8. If there isn’t a suitable fund in a particular sector we’ll just leave that sector blank.
9. The Wealth 150 is not a buy list per se or a fund. This is a fund list for investors who have already decided they want to invest in a particular sector.
10. No one pays to get on the list.