Hargreaves Lansdown has released its new 68-strong Wealth Shortlist – a rebranded version of its Wealth 50 list – which has a renewed focus on passive and ESG funds, and now places greater emphasis on performance potential rather than savings for funds' ongoing charges.
The newly-rebalanced list, which was released this morning, currently includes eight Asia Pacific equity funds, six corporate and government bond funds, four EM and European funds respectively and eight global funds.
It also has a separate category for responsible funds, of which there are three listed: Kames Ethical Equity, BNY Mellon Sustainable Real Return and Legal & General Future World ESG Developed Index.
UK equity funds are separated into UK Growth (which includes Liontrust UK Growth, LF Majedie UK Equity and Unicorn Outstanding British Companies), UK Small & Mid-Sized Companies (featuring Franklin UK Mid Cap, Marlborough UK Micro-Cap and Legal & General UK Mid Cap Index), and UK Equity Income (which includes Threadneedle UK Equity Income, Jupiter Income and Troy Trojan Income). Following the rebalance, the UK categories hold seven, four and six funds respectively.
Each fund on the list is now ranked out of five for fund charges - a feature that will soon be rolled out across the whole investment platform - but OCFs are no longer a factor in the decision-making process.
Instead, HL negotiate discounts for all funds on the list.
Each fund is also labelled as 'actively-managed' or 'tracker' and listed alongside their yield and their fund objective (such as 'income' or growth').
Other changes made to the new Wealth Shortlist include additional data points built into the selection process to further monitor risk, and guidance as to how each fund could fit into a portfolio.
Each category has a full review accompanying the funds, while decisions regarding which products to add to the list are now made by separate teams and are overseen by committees, as well as a newly-appointed non-executive director.
Emma Wall, head of investment analysis at Hargreaves Lansdown, said the firm has "taken [its] time to get this right".
"We have conducted extensive research and testing with our clients and listened to what they need and what is important to them, including reviewing our investment process and how we communicated with clients," she said.
"The result is an evolution of the Wealth 50 to the Wealth Shortlist and Fund Finder which have our clients and their outcomes at the centre of our thinking.
"We have improved our transparency of research and process, the information, tools and support we provide clients, and the governance and risk controls of our processes and removed the fund price as a factor for fund selection.
"Our research notes are more in-depth for those clients who want more detail and they help clients understand how a fund may fit into a portfolio."
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