Confused about ISA rule

Alexland

I don't know much about Nutmeg pots (proprietary terminology) but if they are all in the same ISA account using money contributed last tax year it should be fine.

masonic

Alexland said:

P.s. Masonic the Nutmeg portfolios are made from normal ETFs so they don't have their own funds as such. When your ETFs move too far away from their target allocation they rebalance your account for you.

Yes, I'm treating their portfolios as if they were a fund-of-funds - it's about the closest analogy. My understanding is you pick one and any new money will be invested according to that choice.

Alexland

masonic said:

Yes, I'm treating their portfolios as if they were a fund-of-funds - it's about the closest analogy. My understanding is you pick one and any new money will be invested according to that choice.

I guess the main difference is that with Nutmeg investors who invest on different days end up with a slightly different portfolio weightings (as they drift over time) and might be rebalanced at different times.

masonic

Alexland said:

masonic said:

Yes, I'm treating their portfolios as if they were a fund-of-funds - it's about the closest analogy. My understanding is you pick one and any new money will be invested according to that choice.

I guess the main difference is that with Nutmeg investors who invest on different days end up with a slightly different portfolio weightings (as they drift over time) and might be rebalanced at different times.

Ah, ok, I didn't realise each account was rebalanced individually. Seems awfully inefficient.

Alexland

masonic said:

Ah, ok, I didn't realise each account was rebalanced individually. Seems awfully inefficient.

That's the robo aspect of ETF allocation. There are lots of wealth managers and advisors doing similar with individual client portfolios.

masonic

Alexland said:

masonic said:

Ah, ok, I didn't realise each account was rebalanced individually. Seems awfully inefficient.

That's the robo aspect of ETF allocation. There are lots of wealth managers and advisors doing similar with individual client portfolios.

Yes, I've seen some boutique providers doing it that way, and it make sense for them to put people directly into existing financial instruments and add a platform or advisory fee on top. I would have thought there would come a point where it was more cost efficient to structure as a collective investment, rather like the multi-asset funds we know and love.

Alexland

masonic said:

I would have thought there would come a point where it was more cost efficient to structure as a collective investment, rather like the multi-asset funds we know and love.

If people feel they are getting a bespoke portfolio then they might pay more in which case the cost may be less important than the profit margin opportunity.

missymouse

Nutmeg offer these options for their funds

i would for go balanced but which type of management is my dilemma 

Fixed
allocation

•  Diversified & regularly rebalanced
•  Wide range of risk levels available
•  Proactively managed by experts
•  Social responsibility focus

Fully
managed

•  Diversified & regularly rebalanced
•  Wide range of risk levels available
•  Proactively managed by experts
•  Social responsibility focus

Obviously the latter is more expensive.

any thoughts?

Alexland

My thoughts are they make more profit on the fully managed and have no evidence that customers have or will do better.

missymouse

So I think the fully managed is 0.75% charge and you think that would be better as there is more care to adjust the investment etc