Nutmeg isa doing terribly do I take the loss and transfer to a different provider? 20 February at 11:28AM edited 20 February at 11:29AM in Savings & investments 12 replies 1.3K views

emwi

Over the past couple of years I have transferred £60,000 into a Nutmeg ISA which is now worth about £56,000. It looks like it is performing really badly compared to comparable funds. I assume Nutmeg is not going to get any better at managing my investments so what do I do? Leave it where it is, transfer to another actively managed fund or transfer to a stock market tracker fund? 

Alistair31

What fund is it invested in and what fund are you using as a comparison?

Maybe you are invested beyond your risk level if you are considering crystallising a loss of <10%?

Linton

An investment dropping from £60K to £56K over the past 2 years is not doing terribly.  The past 2 years have been difficult for many investors thanks to post-Covid supply disruption and Ukraine. What Nutmeg investment are you using and what do you believe are comparable investments?

Albermarle

Maybe this is of some interest, although it is a bit out of date.

Robo performance: January 2020 - June 2022 | Boring Money

emwi

Thanks for your replies. The ISA is a socially responsible one (score 7.1%) and I have put my risk level at 6/10. My information about comparison comes from https://www.nutsaboutmoney.com/reviews/nutmeg# which says: 'If we compare with Moneyfarm, another popular digital wealth manager in the UK, and using a similar risk level as we have used for Nutmeg, over the last 5 years, they have grown 12.9%. That’s pretty amazing considering the current economic climate, but it’s also 3 times more than Nutmeg.'

I understand that stocks go up and down and I think that by choosing high social responsiblilty I have probably missed out on a share of the massive profits made from oil and weapons manufacture however, it does seem that Nutmeg aren't performing particularly well anyway.

While I understand the current economic climate is difficult, the fact that the uk stock market has just hit an all time high makes me think Nutmeg isn't all that great. I will not need the money for at least five years unless there's a big unforseen financial emergency. So, stick it out or move?

emwi

Sorry, I should add that the nutsabout money article also compared across the industry not just with moneyfarm.

Linton

Looking at the composition of the OPs investment (Socially responsible 6/10) one sees that it is a pretty standard 60/40 equity/bonds portfolio constructed from about 18 indiviual country and bond index funds with a country allocation fairly similar to VLS60.  So no reason for it to have behaved very differently to other similar funds.

We dont know what the OP means exactly by "transferring over the past couple of years".  Exactly when the transfers took place will make a great difference to the gains/losses.   Over exactly 2 years VLS60 has returned about 1.5%.  But from December 2021 it returned -7%.

There are other factors:
 - going for sustainable funds means the OP has missed out on the very lucrative increase in the price of the oil/gas companies.
 - are the stated results before or after charges?
 - comparisons of 1-2 years are pretty meaningless.

So from the evidence available I see no convincing evidence of the Nutmeg fund underperforming equivalent funds over the past 2 years..

jimjames

Where did you transfer the money from? How much would it still be worth if it was left where it was before? (assuming not cash ISA) You should be able to work out that value from current price and units you held previously

dunstonh

. It looks like it is performing really badly compared to comparable funds.

Its not.

 I assume Nutmeg is not going to get any better at managing my investments so what do I do?

Spend some time learning about investments so you don't make snap decisions based on a lack of understanding.

 The ISA is a socially responsible one 

So you should expect lower returns than conventional investments.   Ethical, responsible, ESG investing historically results in lower returns.   

 I have put my risk level at 6/10. 

So, broadly speaking (as I havent checked the exact ratios), around 40% of your portfolio was in areas that suffered two black swan events in 2022.

My information about comparison comes from https://www.nutsaboutmoney.com/reviews/nutmeg# which says: 'If we compare with Moneyfarm, another popular digital wealth manager in the UK, and using a similar risk level as we have used for Nutmeg, over the last 5 years, they have grown 12.9%. That’s pretty amazing considering the current economic climate, but it’s also 3 times more than Nutmeg.'

But not like-for-like. So completely pointless to rely on it.

Leave it where it is, transfer to another actively managed fund or transfer to a stock market tracker fund? 

You are already in a portfolio of trackers.  A portfolio of trackers will have some degree of management whether it is the company you use own decisions. i.e. what trackers you are going to use?  What weightings are you going to give to each area?    In the case of ESG, what decisions you make on your filtering/priorities?  What countries/regions and bond types you are going to use?  How much are you going to apply time weightings to your selection?    How frequently you rebalance?   whether you use static ratios or fluid? and so on.

Even if you use trackers or the company uses trackers, there are still management decisions to be made.

Schwarzwald

Linton said:

An investment dropping from £60K to £56K over the past 2 years is not doing terribly.  The past 2 years have been difficult for many investors thanks to post-Covid supply disruption and Ukraine. What Nutmeg investment are you using and what do you believe are comparable investments?

OP needs to clarify when the ISA was started, but it must be at least tax year 2020-21 as totaly cash invested is £60k/20k limit p.a.= 3+years, most likely 3-5 years.

Nasdaq is still up materially over L5Y, but probably more a 10/10 risk weithing and obv not ESG-focused.

These comparisons are not simple, but I would agree that Nutmeg doesnt do a great job in making it easy to compare performance.

artyboy

Schwarzwald said:

Linton said:

An investment dropping from £60K to £56K over the past 2 years is not doing terribly.  The past 2 years have been difficult for many investors thanks to post-Covid supply disruption and Ukraine. What Nutmeg investment are you using and what do you believe are comparable investments?

OP needs to clarify when the ISA was started, but it must be at least tax year 2020-21 as totaly cash invested is £60k/20k limit p.a.= 3+years, most likely 3-5 years.

Nasdaq is still up materially over L5Y, but probably more a 10/10 risk weithing and obv not ESG-focused.

These comparisons are not simple, but I would agree that Nutmeg doesnt do a great job in making it easy to compare performance.

And that last point is my main motivator for moving my pension out. I don't get the sense that they are materially better or worse than my other lower cost investments, and so cannot justify the higher fees to myself. I'll take greater transparency and lower fees, and if it doesn't work out in the long run then I'll just have to be a big boy and not blub about it...

Anyway, they gave me a boat load of Avios when I first transferred in, and there are plenty of incentives with other providers for transferring out - yes I'll be out of the market because it can't be done in specie, but if I do it in stages, it will spread the risk there.