Advantages, disadvantages and who should create an account

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Account minimum

£100 to £500

Fees

0.25% to 0.75% (fees start at 0.75% for those with lower balances)

Account minimum

£100 to £500

Fees

0.25% to 0.75% (fees start at 0.75% for those with lower balances)

Advantage

  • Multiple portfolio types: socially responsible, smart alpha, fixed allocation and fully managed
  • Automatic rebalancing; Nutmeg automatically adjusts the allocation to protect against certain financial conditions
  • Multiple account types
  • Access to financial planning and asset managers

Disadvantages

  • High fees for balances below £100,000
  • High fund fees

More information

  • Campaign: None at this time.

Overall rating

Is Nutmeg for you?

Nutmeg is a JP Morgan Chase-owned investment platform that offers automated portfolio management to investors in the UK. The platform offers products such as general investment accounts, pensions and individual savings accounts (ISAs). It’s best suited for hands-off investors who value expert monitoring and automated features like portfolio rebalancing and asset allocation.

Nutmeg also gives you access to several different portfolios – including socially responsible, smart alpha, fixed allocation and fully managed portfolios – that invest in ETFs. In addition, you can use guidance from asset managers.

Nutmeg vs. MoneyFarm

Nutmeg and MoneyFarm are both leaders in the UK digital investment space. Both offer general investment accounts, various ISAs and pensions. Both also have expense ratios that are close to 0.20%.

But those with higher balances will pay less per year on Nutmeg. You need to spend at least £100,000 to get the 0.25% fee at Nutmeg, but you need to spend a minimum of £500,000 to qualify for MoneyFarm’s lowest annual rate of 0.35%.

Nutmeg vs. Vanguard Digital Advisor

Nutmeg and Vanguard serve different audiences: one caters to UK customers, while the other focuses mainly on US customers. But when it comes to automated investing, both primarily use ETFs when building personal portfolios.

Although the value of the pound typically outweighs the value of the dollar, you still need to spend more to get started with Vanguard’s automated account, the Vanguard Digital Advisor. However, you pay less in advisory fees and fund fees.

Ways to invest with Nutmeg

Automated portfolio management

Nutmeg is a great option for hands-off UK investors who want their assets and accounts managed for them. Its products include general investment accounts, pensions, lifetime ISAs, stocks and shares ISAs and junior ISAs (ISAs are savings and investment accounts that offer tax-free allowances and are exclusively for UK residents) . When it comes to portfolio types, Nutmeg offers four:

  • Fully managed: Nutmeg uses its investment team to build and manage these portfolios, and this option focuses on globally diversified ETFs. Additionally, you’ll be able to choose from 10 different risk levels, and Nutmeg regularly rebalances your assets and adjusts your allocation when necessary. The five-year average return for these portfolios is 16.5%.
  • Smart Alpha: These portfolios are also managed by experts and merge the investment philosophies of both Nutmeg and JP Morgan Asset Management. According to Nutmeg, these portfolios utilize unique research-driven security selection while investing in both passive ETFs and JP Morgan-selected active ETFs.
  • Socially responsible: These portfolios are good for those who want to make an impact with their investments. They focus your investments on companies with high standards for environmental, social and corporate governance (ESG). Plus, Nutmeg filters out ETFs with companies that engage in harmful or controversial activities.
  • Fixed allocation: This option is great for those who want minimal interference from Nutmeg’s investment experts. You get access to automatic portfolio realignment, but Nutmeg’s team only reviews your portfolio once a year. As it is not fully managed, it is a much cheaper option than the other portfolios.

You also need to factor in fund costs (these are different for each portfolio). Nutmeg’s fund fees are much higher than those of the ETFs used in US-based automated investment platforms. For example, its fully managed portfolios have an average fund cost of 0.20%. Its smart alphas ETFs will cost you an extra 0.22% and its socially responsible portfolios have an average fund cost of 0.29%. Fixed allocations have an average fund charge of 0.19%.

But US platforms like Wealthfront have expense percentages that can be as low as 0.05%.

Services and Tools

Nutmeg also offers financial planning and you can book a free call with its wealth managers to see which options are best for you. In addition, the platform offers several educational guides on topics such as ETFs, ethical investing and more.

It also provides access to free tools including its standalone tax calculator, compound return calculator, ISA calculator and pension calculator.

Nutmeg: Is it trustworthy?

Nutmeg does not have a profile with the Better Business Bureau as it is not a US company. But the robo-advisor is a legitimate business regulated by the Financial Conduct Authority. In addition, the platform’s record is clear of any major lawsuits or scandals over the past few years.

Nutmeg — Frequently Asked Questions (FAQ)

Can you invest in individual shares with Nutmeg?

No. Nutmeg does not let you buy individual stocks, nor does it allow you to choose which investments to include in your portfolio. The robo-advisor creates and manages a personalized ETF portfolio for you.

Is nutmeg good for beginners?

Since Nutmeg offers automated portfolio management for multiple account types, it can be a good option for newcomers to the investment space. You don’t have to make the day-to-day trading decisions as Nutmeg handles it all for you.

Are Nutmeg’s fees worth it?

Nutmeg has fairly high fees for users with balances below £100,000. With the four different portfolio options, you pay either 0.75% or 0.45% if your account balance does not exceed the £100,000 threshold. Investors with more than £100,000 will pay much less in fees (eg 0.25% or 0.35%).

The answer to this question depends on your investment preferences.

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