Nutmeg - Investment Management - Thoughts?

luke222010

Hello all,

Has anyone had any experience of the website Nutmeg?
I'm looking at the possibility of investing some money (thinking of starting off with £2k put in, and £100 monthly payments from there on over 10 years.
From this the tool reckons i'd get a median of around £16,740, with a 5% chance of £13,991 or less using the "Slow and Steady" option to invest (48% corporate bonds, 32% developed equities, 8% government bonds & investments, 2% property & infrastructure, 10% other).
I believe i'd be putting in £14k of my own money over the 10 years, so a profit of around £2700 *if* the median is accurate.

Now, my questions to those on this forum with experience of investing are:
1. Would I be better served to put the money elsewhere?
2. What are the tax implications of investing in this manner (if any at all when profit is only around £2700)?
3. Obviously investing in this way, you are always at risk of making a loss, but if anyone has any experience of investing in this way, i'd be interested to hear them.

Cheers,
L.

RichardS

I'm very interested in answers to this as well. I have invested a lump sum of around £16K in Nutmeg (split over three funds - Level 4, Level 6 and Level 8). I have about 50% at Level 4, 30% at Level 6 and 20% at Level 8. I am paying in £225 a month - £75 into each fund). My portfolio has a S&S ISA built into it. My plan is to build up £100K in around 12-13 years time and according to Nutmeg's projections I should do that. I chose Nutmeg because I love the way the website works - its transparency, the way it lets you easily see what you have put in and what you have got out (after fees) but whether this was all a wise move I have no idea really!

Conrad

Some top American guru on Bloomberg once said 'don't forget the sleep at night premium'.


This for me is the most important factor in choosing a provider. Can they somehow go belly up in the way Equitable Life or Lehmans did?


It's all very well fretting over rather slim differences in charges as some do but surely the most important consideration is peace of mind or is it just me?


BTW I know zilch about Nutmeg / platforms etc so take my musing with a dose of salt.

Reaper

I suggest you do a forum search on Nutmeg to see all the previous views.

For example:
https://forums.moneysavingexpert.com/discussion/4485351

In brief it is nice and easy to use, but you could do it cheaper.

jimjames

luke222010 wrote: »

those on this forum with experience of investing are:
1. Would I be better served to put the money elsewhere?
2. What are the tax implications of investing in this manner (if any at all when profit is only around £2700)?
3. Obviously investing in this way, you are always at risk of making a loss, but if anyone has any experience of investing in this way, i'd be interested to hear them.

Cheers,
L.

1) Almost certainly yes. Even HL who are considered expensive, are cheaper than Nutmeg
2) Inside an ISA there is no tax to pay
3) Long term you should do far better than cash. It can be scary to see your investments drop in value but that is the ideal time to buy more not to sell.

RichardS

Conrad - from the Nutmeg Q&A:

"2) We use the world’s largest custodian bank

In addition, Nutmeg never actually handles your money. Like many investment managers, we believe that the safest way of looking after your investments is to appoint a “custodian bank”, which holds your money and the investments we purchase for you. Our custodian is called Pershing Securities Limited, which is part of BNY (Bank of New York) Mellon, the world’s largest custodian, with £16 trillion in assets under custody and payments averaging £1 trillion per day. Pershing serves thousands of investment managers, high-net-worth individuals and major banks worldwide, including Kleinwort Benson, Nomura and Rothschild. Your assets are in good hands."

luke222010

RichardS wrote: »

I'm very interested in answers to this as well. I have invested a lump sum of around £16K in Nutmeg (split over three funds - Level 4, Level 6 and Level 8). I have about 50% at Level 4, 30% at Level 6 and 20% at Level 8. I am paying in £225 a month - £75 into each fund). My portfolio has a S&S ISA built into it. My plan is to build up £100K in around 12-13 years time and according to Nutmeg's projections I should do that. I chose Nutmeg because I love the way the website works - its transparency, the way it lets you easily see what you have put in and what you have got out (after fees) but whether this was all a wise move I have no idea really!

I'd be interested to hear how your investment is progressing...
What sort of tax implications would there be assuming your return was £100k?
I'm kind of in the same boat, my knowledge is probably less than yours, and their website and transparency as you say, is exactly what's drawing me to it, but the your view "whether this was all a wise move I have no idea really" is exactly the thought process i'm in now!

innovate

The size of a bank is not a guarantor for their safety. Having your investments in a non-UK bank adds to your risk.

RichardS

luke222010, I only invested 2 months ago. Currently, after fees I am £245 up (1.4%). £16k of the £17k I have in there is wrapped as an ISA. I know others on here say there are cheaper alternatives but Nutmeg do seem to make it all very easy to manage and view (especially the automatic ISA wrapper) and that all seems to add value to me. As to the safety of the money, I have no idea about that.

RichardS

Forgot to add - re taxes, mine will be 99% S&S ISA so tax-free I guess (I am not an expert!)

grey_gym_sock

Conrad wrote: »

Can they somehow go belly up in the way Equitable Life or Lehmans did?

this is a bit vague. in that EL and lehmans didn't go belly up in the same way. (EL didn't actually go bankrupt.)

i would say the main lesson from EL is to avoid opaque investment products (like "with profits").

i don't find it entirely reassuring that custody of assets tends to come down to very big banks. however, i suspect that's how the global custody system works. can you even practically invest (directly or indirectly) in securities outside the UK without relying on big banks as custodians?

this is only an issue if the rules are broken - i.e. assets are not segregated properly. providing the rules are followed, it doesn't matter if a custodian bank goes bust.

if assets are lost, and an investment company regulated in the UK is responsible, and they can't pay, you should be able to claim up to £50k in losses from the FSCS. so you could limit investments to £50k per investment company, or at least split investments among several companies (if you have too much to make it practical to stick to £50k).

however, the FSCS may not cover it if the fault is not due to the company you deal with directly, but to a separate custodian, especially if the latter is outside the UK.

you could also try sticking to investment companies with very large parent companies. though the parent won't necessarily stand behind its subsidiary's obligations. (and if "very large" means a big bank, is that a paragon stability anyway?)