Nutmeg Investment Costs example

JDent100 · 17 June 2021 at 9:52AM

Daft question but if I were to invest £20k into the Nutmeg stocks & shares ISA do-it-for-me platform, whilst the first year is free there is an average platform cost of 0.6% (using the 0.45 - 0.75 range) plus an annual fund management charge 0.24% (using the 0.17 - 0.31 range) - so can i assume that in the second year cost to me taken out of the 20k investment might be 20,000 x (0.6% + 0.24%) = £168?

Malthusian · 17 June 2021 at 10:03AM

Are you sure about that first year free thing? There's no mention of it on their fees page or front page.

It would only be 0.6% if you divided it 50/50 between the "Fixed Allocation" structure and any combination of the three others. Which seems a bit arbitrary.

Your algebra is correct but I'm not sure you're looking at the right figures. The fund costs are 0.14% - 0.32% according to Nutmeg's fees page and the average of those figures isn't really important, what matters is the fund costs for the approach you would be investing in.

barnstar2077 · 17 June 2021 at 11:21AM

If you want simple and cheap then one of the Vanguard Lifestrategy funds on the Vanguard website would be an option. 0.15% platform and 0.22% fund cost. If you want 100% equities then their FTSE global all cap fund may be a better option. I am using my phone or I would paste some links, but if you type vanguard lifestrategy into YouTube / google I am sure you will find what you need. Cheaper than Nutmeg and no harder to use than online banking. just pick your risk / volatilty level and invest.