HL Multi-Manager Special Situations Trust research update

Kate Marshall | Mon 20 July 2015

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Roger Clark and Lee Gardhouse, managers of the HL Multi-Manager Special Situations Trust, seek fund managers they believe demonstrate the highest stock-picking calibre. The trust invests on a global basis, providing geographical diversification across the UK, US, European and Asian markets.

The UK accounts for the largest portion of the portfolio at almost 40%. Here, Roger Clark and Lee Gardhouse focus on their highest-conviction fund managers investing across large, medium and higher-risk smaller companies, combining exposure to both growth and income-orientated funds.

The CF Woodford Equity Income Fund is currently the trust's largest position at almost 10%. Roger Clark and Lee Gardhouse formerly held exposure to the manager, Neil Woodford, during his tenure at Invesco Perpetual. He set up his own fund management venture last June, at which point they took the opportunity to switch their holding in the Invesco Perpetual High Income Fund into the new fund. This has proven a shrewd move as the CF Woodford fund has grown by 17.1%* since launch, outperforming his former Invesco Perpetual fund and the UK's FTSE All Share index over the same timeframe, although please remember past performance is not a guide to future returns. Investors in the HL Multi-Manager Special Situations Trust benefitted automatically from this change.

Past performance is not a guide to future returns. Source: Lipper IM* to 01/07/2015

While the managers remain positive on the fund's long-term prospects, they do not want it to become a more dominant part of the portfolio. To maintain diversification, some profits were taken following the strong run.

Elsewhere, the performance of a holding in the GLG Japan CoreAlpha Fund has been exceptionally strong, benefiting from Japanese stock market strength and good stock selection. The managers continue to see good value in Japanese equities and have high conviction in Stephen Harker, manager of the GLG fund, however, in keeping with their disciplined approach some profits were taken following the adventurous fund's strong run. There is no guarantee this performance will continue.

By contrast, the Marlborough UK Micro Cap Growth and Marlborough Nano Cap Growth funds have undergone a subdued period of performance. The team retain faith in the manager of the two funds, Giles Hargreave, who has an excellent long-term track record investing in higher-risk smaller companies. As such, they took the opportunity to rotate some of the profits banked from the Japanese position into the two Marlborough funds.

Our view on this fund

Since launch in April 2001, the fund has delivered impressive performance, growing by 169.1%* compared with 88.7% for the sector average. Although, please remember past performance is not a guide to future returns.

Past performance is not a guide to future returns. Source: Lipper IM* to 01/07/2015

The trust offers exposure to a global portfolio of skilled, experienced managers, who the multi-manager team believe can add value ahead of their respective benchmarks through their stock-picking talent. In our view, this high-conviction portfolio of the multi-manager team's best ideas could provide diversification to a long-term growth portfolio. It also offers the peace of mind that day-to-day management is taken care of by a team of professionals.

This article should not be seen as a promotion of the underlying individual funds. We have listed some of the funds held within the portfolio but not given full details. The HL Multi-Manager funds are managed by our sister company Hargreaves Lansdown Fund Managers.

Find out more about this fund including how to invest

Please read the key features/key investor information document in addition to the information above.