Hargreaves Lansdown stops offering non-sterling ETF share classes

Hargreaves Lansdown has stopped offering the non-sterling share classes of exchange traded products including exchange traded funds. The change has affected around 170 products which are not denominated in sterling.

For example, prior to October 28, when the change took effect, it was offering the US share class of VanEck Vectors Video Gaming and eSports Ucits ETF (ESPO) as well as the sterling share class. But after that date investors have only been able to buy the sterling share class — VanEck Vectors Video Gaming and eSports Ucits ETF (ESGB).

The investment platform decided to make the change because it only trades and settles stocks in sterling, and many of the market makers it uses to trade do not provide quotes or settle non-sterling investments into sterling. Hargreaves Lansdown says that this means it cannot be certain it is always getting the best prices on trades. And as it cannot trade most non-sterling denominated stocks online dealing charges are more expensive, while trading over the phone takes more time and effort than an online trade.

Investors who already hold the non-sterling share classes of these ETFs can continue to hold and/or sell them, with normal dealing charges applying. And they will still be able to buy the sterling share classes of these funds.

This article was previously published by Investors Chronicle, a title owned by the FT Group.

If investors made regular monthly investments into the non-sterling share classes of these ETPs, they were cancelled on October 28. If investors want to continue to invest each month in the given ETP, they will need to reinstruct Hargreaves Lansdown to make regular monthly investments into the sterling share class.

The change only applies to non-sterling London Stock Exchange (LSEG) traded shares which also offer a sterling share class. The platform will continue to offer non-sterling securities which do not have a sterling share class and foreign-listed stocks.

It will be possible to continue to buy foreign currency share classes of London-listed ETPs on other investment platforms. Charles Stanley, for example, said that it still offered investments in non-sterling denominated currencies. AJ Bell (AJB) also offers non-sterling share classes and does not have any plans to change this, although it said that if a product had a sterling share class it offered this as the default option.

*Investors Chronicle is a 160-year-old publication owned by the Financial Times offering an expert and independent view of the investment market. It provides educational features, investment commentary, actionable tips and personal finance coverage. To find out more, visit investorschronicle.co.uk

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