Nutmeg - Investment Management - Thoughts?

masonic

Difficult to judge it over a short period, but you could compare with a set of global trackers like Vanguard Lifestrategy. Over 8 months, the returns there were:

100% Equities/0% Bonds: up 9.5%
60% Equities/40% Bonds: up 9%
20% Equities/80% Bonds: up 8%

dunstonh

My Level 4 fund is up 3.4%, my Level 6 fund is up 4.6% and my Level 8 fund is up 2.1%.

What is the volatility rating of your overall portfolio? Without knowledge of that, it is difficult for anyone to put any context on it.

masonic

dunstonh wrote: »

What is the volatility rating of your overall portfolio? Without knowledge of that, it is difficult for anyone to put any context on it.

Nutmeg portfolios are generally composed of ETFs and they have 10 portfolios corresponding to a risk scale (1 - Cautious to 10 - Aggressive). A mid-risk portfolio (45% bonds, 35% UK, 10% World ex UK, 10% EM) has a volatility of 9%.

They do have some performance data on their site. Over 1 year, their portfolios tend to underperform the relevant market return by about 2% after charges. Average charges are 0.82% for the fund of funds and 0.23% underlying. Presumably the platform is free.

dunstonh

masonic wrote: »

Nutmeg portfolios are generally composed of ETFs and they have 10 portfolios corresponding to a risk scale (1 - Cautious to 10 - Aggressive). A mid-risk portfolio (45% bonds, 35% UK, 10% World ex UK, 10% EM) has a volatility of 9%.

They do have some performance data on their site. Over 1 year, their portfolios tend to underperform the relevant market return by about 2% after charges. Average charges are 0.82% for the fund of funds and 0.23% underlying. Presumably the platform is free.

So, to sum it up, they dont look very attractive as an investment option.

cjdl_2

Excuse the bump

I'm invested with Nutmeg, I'm 100% in their risk level 9 portfolio (I'm young enough & I do love a bit of danger :rotfl:) and I'm currently sitting on a 13.08% overall return, after fees. My average is ~8.5% up. As it's in the higher risk bracket, it can be pretty volatile, but the lowest I've seen it drop is -2.4% in a day.

I'm tempted to drop down to level 8 to get a bit more exposure to UK gilts as level 9 is pretty heavily invested in the US, which many are of the opinion is overvalued ATM.

I used to self-manage my investments, but to be honest I don't really have the time, inclination, or if i'm entirely honest - the knowledge - to do it anymore, so went for the the managed option.

Not been with them all that long, but very happy so far. Agree with the comments regarding their website and transparency, I do find it refreshing.

They also have just launched a personal pension product which I'm transferring my SIPP to from HL (for the above reasons). That'll go into level 7/8.

Re: Fees, when the pension transfer completes they'll take the total funds under investment across all portfolios, ISA, non-ISA & pension, and it's that amount that determines your fee level across the board. It'll be higher than HL, but not by *that* much.

As someone alluded to in an earlier post, yes, you can DIY cheaper (isn't this the case with everything?)... but if you don't have the time/knowledge/appetite for it - I think their fees are pretty reasonable for what you get.

HTH
Chris.

masonic

cjdl wrote: »

As someone alluded to in an earlier post, yes, you can DIY cheaper (isn't this the case with everything?)... but if you don't have the time/knowledge/appetite for it - I think their fees are pretty reasonable for what you get.

It doesn't look pretty reasonable when compared with the likes of Vanguard Lifestrategy, L&G Multi Index and others. No need to choose multiple funds any more if you simply want to choose a risk level and then buy and forget. You can achieve better results* with the same amount of effort, but with significantly lower charges by simply opting for a multi-asset fund on a conventional platform.

*(based on the data provided by RichardS)

Sobryma

Their performance data is available on their site, with comparison to ARC benchmarks:

http://www.nutmeg.com/how-we-invest#portfolio-performance

I think their new pension option looks quite interesting but could do with more detail actual asset allocations.

masonic

Sobryma wrote: »

Their performance data is available on their site, with comparison to ARC benchmarks:

http://www.nutmeg.com/how-we-invest#portfolio-performance

Yes, I alluded to that above. Over 1 year, they are generally underperforming the average fund and underperforming the market return by a lot more than charges, which is quite worrying. It seems to suggest that they are incurring a high level of trading costs within their funds (might have something to do with using ETFs) and/or they are struggling to stay fully invested because of net inflows.

These funds, and other multi asset funds should match the market return minus charges (e.g. market return minus 1% for Nutmeg, or market return minus <0.5% for some of the cheaper multi asset funds available elsewhere). What they are delivering is more like market return minus 2% at the moment.

I think their new pension option looks quite interesting but could do with more detail actual asset allocations.

You can get a rough idea by hovering over the about link here. That's one of their mid-risk portfolios. They show you the differences between low, medium and high risk options here, so you can get a reasonable guide. They aren't going to give the game away completely because then people would be able to copy the allocations for a much lower cost, or see they offer no advantages over cheaper multi asset funds.

Sobryma

masonic wrote: »

You can get a rough idea by hovering over the about link here. That's one of their mid-risk portfolios. They show you the differences between low, medium and high risk options here, so you can get a reasonable guide. They aren't going to give the game away completely because then people would be able to copy the allocations for a much lower cost, or see they offer no advantages over cheaper multi asset funds.

I have tried to do a comparison to the Bestinvest Managed Portfolio service I use. Its not always just charges though - Nutmeg appears to have similar performance for Portfolio 6 but I think the risk level and volatility is higher than Bestinvest portfolio (which is FE risk 44).

dunstonh

Re: Fees, when the pension transfer completes they'll take the total funds under investment across all portfolios, ISA, non-ISA & pension, and it's that amount that determines your fee level across the board. It'll be higher than HL, but not by *that* much.

But you are paying more for a DIY solution than an advised solution. So none of the consumer protection but more of the cost.