Hargreaves Lansdown nets £233m in multi-manager fund launch

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Hargreaves Lansdown has seen its largest ever fund launch for its Multi-Manager High Income fund, showing a strong demand from investors for the sector.

The fund raised £233m, the second biggest launch ever after CF Woodford Equity Income, which raised £1.6bn during the offer period.

The fund, which is initially invested 60 per cent in shares and 40 per cent in corporate bonds, aims to deliver yield of 4.5 per cent.

“Investor demand for income remains strong in a world starved of yield. Ultra-low interest rates show no sign of changing and generating an attractive monthly income from savings and investments is a challenge,” said Hargreaves Lansdown chief investment officer Lee Gardhouse.

“Many of the traditional sources of income have evaporated. In the meantime, ISA and pension freedom investors need sustainable and rising income.”

The fund aims to meet investor demand for high regular income by “blending together the cream of the crop of managers”.

Sidestepping some of the many star managers in the UK equity income space, managers Lee Gardhouse and Ellen Powley have picked smaller funds, including two Artemis funds: global equity income and high income.

Jupiter’s Asian income fund was among the equity picks, while Royal London features twice in the bonds picks with the corporate bond and sterling extra yield bond funds.

In contrast to most income funds, which pay quarterly or bi-annually, dividends on te Hargreaves fund will be paid monthly.

Hargreaves Lansdown’s fund has an initial charge of 3 per cent and ongoing charge of 1.33 per cent.