If you’re one of the 1.1m people across the UK who has invested money with the UK’s largest investment platform Hargreaves Lansdown, you may be interested to learn that the group has today launched a new service – its Wealth 50.
This is a concentrated list of the investment group’s favourite funds, and it will replace the company’s previous Wealth 150 and Wealth 150+ lists. Let’s take a closer look at what the new Wealth 50 service means for investors.
Wealth 50 list
The list is essentially a shortlist of Hargreaves’ highest-conviction funds. It’s designed to make the process of investing in funds much easier.
The list contains 50 top ‘active’ funds, all of which are managed by professional fund managers, as well as 10 ‘passive’ funds (also known as exchange-traded funds or ETFs). It’s divided into a diverse mix of categories, including UK Growth funds, UK Equity Income funds, UK Small and Medium-Sized Companies options, and Global funds. A new fund screening tool enables investors to select based on objectives, risk, performance, cost and sector.
When analysing investment managers, Hargreaves specifically looked for a robust investment process and a strong long-term track record, and the company says that it spent thousands of hours crunching the numbers and meeting fund managers in order to identify the operations that have the most potential in each sector.
Another major development is that Hargreaves has today announced that it has negotiated lower fund charges for its clients. Wealth 50 funds will offer an average annual saving of 30% on ongoing charges, with the cheapest active fund carrying an annual charge of just 0.22%, while the cheapest passive one comes in at a low 0.04%. “We’ve also taken the opportunity to use the combined buying power of our clients to negotiate lower fund charges on their behalf, so investors get even better value when they buy funds through Hargreaves Lansdown,” said CEO Chris Hill.
I see the launch of the new Wealth 50 as a positive development for investors.
With over 3,000 funds available to investors, the process of choosing one can certainly be daunting. Essentially, the Wealth 50 makes it easier than ever to identify a reputable pick that offers a good mix of performance potential and cost-efficiency. For beginner investors, in particular, this is a real plus. There are some excellent names in the mix, including two of my favourites – the Lindsell Train UK Equity fund and the Marlborough Multi Cap Income fund.
Furthermore, the lower fee structure is also fantastic news. Investment fees can add up over time, so the fewer fees that investors pay, the better. Many high-quality funds within the Wealth 50 now have fees of just 0.5% per year.
Overall, for those looking to invest in the stock market through a fund, rather than directly through individual stocks, the Wealth 50 appears to be a good place to start.
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Edward Sheldon owns shares in Hargreaves Lansdown. The Motley Fool UK has recommended Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.