Hargreaves Lansdown has revealed its shareholdings for the HL Select UK Shares fund with Burberry and British American Tobacco among the largest positions.
The luxury goods and tobacco companies account for 4.8 and 4.7 per cent respectively.
“Burberry is a luxury goods brand going through a tough time, but with excellent financial strength, not least a cash pile of over half a billion pounds,” says fund manager Steve Clayton.
The fund launched on 1 December with an ongoing charge figure of 0.6 per cent.
In total, the first portfolio breakdown reveals holdings in 21 companies plus an ETF.
Advertising business WPP, Unilever, Diageo and Compass Group are also the largest shareholdings.
Clayton says many of the stocks earn most of their income from overseas to provide the fund with insulation should the UK economy move in “flips and flops” towards Brexit.
Until the fund managers have more time to build positions in smaller, more illiquid companies the largest holding is the iShares Core FTSE 100 ETF, which accounts for 9.2 per cent.
Clayton says: “As we find parcels of shares in the smaller companies we want to buy, we will sell down the ETF until only a small holding remains, to keep a little powder dry for times when opportunities pop up.”
Clayton says the smaller companies will be added to the portfolio over the coming weeks.