HL Growth Fund Annual Asset Allocation Review

Since launch on 15th December 2021, our default fund, the HL Growth Fund has delivered growth of 9.2% to 30 April 2025, versus the average performance of similar funds in the IA Mixed Investment 40-85% Shares Sector of 4.5%.

Our annual review is led by the Strategic Asset Allocation Forum (SAAF) who construct diversified portfolios that meet defined objectives within risk parameters and reflect our latest capital market assumptions (CMAs). The SAAF is made up of a group of investment professionals from the fund management and asset management arms of our business.

The 2025 review resulted in a modest increase in equity exposure and a reduction in bond holdings to maintain target volatility. A diversified allocation across listed equities and bonds was maintained and no asset classes were added or removed after consideration of several alternatives.

Key Allocation Changes

Asset Class
Previous Portfolio Target Weight
New Portfolio Target Weight
Developed Market Global Corporate Bonds
10.3%
7.5% ▼
Global Government Bonds
2.0%
2.0%
Global Index-Linked Government Bonds
2.0%
2.0%
Global High Yield Bonds
2.0%
2.0%
Blended Emerging Market Debt*
2.0%
2.0%
Total Fixed Income
18.3%
15.5% ▼
UK Equities
10.8%
9.7% ▼
Developed Market Ex-UK Equities
50.6%
56.2% ▲
Emerging Market Equities
9.7%
7.6% ▼
Global Smaller Companies
10.6%
11.0% ▲
Total Equities
81.7%
84.5% ▲
Total
100%
100%
Asset Class
Previous Portfolio Target Weight
New Portfolio Target Weight
Developed Market Global Corporate Bonds
10.3%
7.5% ▼
Global Government Bonds
2.0%
2.0%
Global Index-Linked Government Bonds
2.0%
2.0%
Global High Yield Bonds
2.0%
2.0%
Blended Emerging Market Debt*
2.0%
2.0%
Total Fixed Income
18.3%
15.5% ▼
UK Equities
10.8%
9.7% ▼
Developed Market Ex-UK Equities
50.6%
56.2% ▲
Emerging Market Equities
9.7%
7.6% ▼
Global Smaller Companies
10.6%
11.0% ▲
Total Equities
81.7%
84.5% ▲
Total
100%
100%

*Blended Emerging Markets Debt consists of one-third hard currency sovereign bonds, one-third local currency sovereign bonds and one-third hard currency corporate bonds. Local currency bonds are unhedged, while exposure to hard currency bonds will be fully hedged.

Rationale for Changes:

  • Equities: The allocation to developed markets ex-UK increased due to better risk-adjusted returns; and exposure to emerging markets and UK equities was reduced.
  • Fixed Income: Diversification was maintained but the overall weight to accommodate higher equity exposure was reduced.
  • Alternatives: Gold and commodities were reviewed but excluded due to inconsistent performance and high volatility.

Please see our full report for further information and if you have any questions, do not hesitate to contact our HL Workplace Product Specialist nick.clough@hl.co.uk.