Hargreaves Lansdown is to launch a low-cost UK equity fund in an open challenge to more expensive funds in the IA All Companies sector.
The Select UK Shares fund will launch on December 1 with an ongoing charge of 0.6%, which the firm says is cheaper than 94% of similar funds and 90% of all active funds available in the UK.
Managed by Steve Clayton, head of equity research at Hargreaves, which is the UK’s largest retail broker, the fund’s portfolio will hold about 30 stocks and focus on companies with strong revenues, high margins and little or no debt. Investors can access the fund for £25 (€29) per month, or a £100 initial investment.
Danny Cox, head of communications at Hargreaves Lansdown, told Funds Europe that trading costs will be low or non-existent due to the long-term nature of the fund, and that little will be spent on marketing.
“We also won’t be passing on running costs to investors. Far too often, we see managers charging investors for research, administration and auditing, and more. These are costs managers themselves incur for running their own businesses, and shouldn’t be imposed on the end client,” Cox added.
Hargreaves Lansdown has repeatedly struck out at fund charges in recent months. In October, the firm announced it was pressing asset management firms and the UK Financial Conduct Authority to introduce a “single, transparent charge, out of which managers pay for running their funds”, and for greater transparency on charges generally.
UK star manager Neil Woodford has already adopted this policy, and Hargreaves Lansdown hopes his prominence will have a “trendsetting” effect on the UK asset management industry.
The Hargreaves fund launch is the first in a series for the firm, with a UK equity income fund planned next.
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