Marlborough Multi-Cap Income: Veteran stock-pickers hunt for under-valued shares beats average fund by almost 30% since launch

By LAURA SHANNON, FINANCIAL MAIL ON SUNDAY

Updated: 05:33 EST, 20 January 2014

Last week, Hargreaves Lansdown, the UK’s largest fund supermarket, revealed new charges for half a million customers who invest via its trading platform, Vantage, from March 1.

This is in response to new rules that will force fund supermarkets to charge investors directly and put an end to companies receiving undisclosed commissions for recommending funds.

Investing up to £250,000 through Vantage will trigger a 0.45 per cent annual fee. This falls to 0.25 per cent between £250,000 and £1million, 0.1 per cent between £1million and £2million, and no charge on bigger funds.

It has also negotiated lower fees charged to investors by fund managers. The average annual management charge for funds on the Wealth 150 – a list of the company’s own top picks – will  be 0.65 per cent, compared with the average of 0.76 per cent if  the funds are bought elsewhere. 

But Hargreaves Lansdown also announced an average annual management charge of 0.54 per cent for a selection of 27 funds featuring on its newly created Wealth 150+. It claims to be a list of the ‘best funds at best prices’.

Fund expert: Siddarth Chand Lall cuts risk by holding 140 firms

The full range has not yet been disclosed but among the examples given is the Marlborough Multi-Cap Income fund. Its annual management fee will be cut to 0.6 per cent from 1.4 per cent.

The fund is run by Giles Hargreave and Siddarth Chand Lall of investment manager Hargreave Hale, whom Jason Hollands, of adviser Bestinvest, refers to as ‘veteran stock pickers’. Their expertise lies in pinpointing under-researched small firms with potential for growth, despite a brief allowing them to invest in those of all sizes.

Hollands says: ‘Less than 10 per cent is allocated to blue-chips and the remainder is split broadly between mid-sized and small companies, areas where the team specialise and which have enjoyed a very strong run of late as recovery fever has taken hold.’

Over the two-and-a-half years since launch, the fund has grown 64 per cent, against 35 per cent for the UK Equity Income sector.

The lion’s share of assets is in FTSE 250 stocks (43 per cent) followed by 22 per cent and 18 per cent respectively in the FTSE SmallCap and AIM. Hargreave and Chand Lall seek to manage risk by holding more than 140 firms, each of which rarely make up more than 2 per cent of assets.