Considered to be among the largest online investment managers in Europe, it aims to make intelligent investing easy by taking some of the most acclaimed investment instruments minus all the complexities involved with trading and present them to their clients with simplified access to stocks and shares through an online app – the Nutmeg app. It has a team of expert consultants who create a globally diversified portfolio for investors aligned to their comfortable level of risk. And, if you are looking for a complete overview of this broker, our Nutmeg review will prove invaluable.
- Nutmeg investment management – portfolios
- How safe is Nutmeg investment?
- Who will find Nutmeg useful for their investment goals?
- Nutmeg fees and charges
Nutmeg Investment Management – Portfolios
The Nutmeg app launched in 2011 as a cheaper alternative to the many wealth management services in the UK. The company has always and will continue to focus on ETFs and the low charges carrying tracker funds. The unique aspect of the Nutmeg investment platform is the fact that the service provider creates a low-cost investment portfolio for its clients based on their level of risk or their risk taking ability. Nutmeg has wide array of investment portfolios.
Investors can choose from any of the 10 investment portfolios available, each of which contains a mix of investment assets. This service is referred to as the Nutmeg fully managed portfolio. Then, there are also the Nutmeg fixed allocation portfolios that are unlike the fully managed portfolios in the sense that these do not dynamically alter in response to volatile market conditions. In this regard, the fixed allocation portfolios are cheaper than the Nutmeg fully managed portfolios as they offset the profit that the stocks may derive if altered based on market conditions. Tailoring the investment portfolio to the investors’ risk profile, the company offers a rather personalised approach to portfolio investments. The portfolio is created by a team of professionals so even if the investors are new to online investing, they can still benefit with good returns. The company also offers a Nutmeg pension portfolio.
How Safe is Nutmeg Investment?
For any company to start making profits, it is important that it reaches its break-even point. This is something that you may look for when making a stock broker comparison. For Nutmeg too that had quite been the case until 2016, when the company first recorded its business profits by hitting £1bn AUM. This was a major turning point for the future of the company and for the investment opportunities therein. One thing that is important for all the investors to be aware of is the fact that the company treats its investors’ funds as separate and not involved with the company’s direct account. Nutmeg safeguards the interest of its investors by holding all customer funds in a separate account with a custodian bank. This custodian bank is like a specialised financial institution that is responsible for safeguarding the financial assets that belong to the investor or the firm. As the company maintains its assets separate from that of its investors, there is never a case of any misuse of the clients’ funds and assets. Also, as the clients’ financial assets are safely held in a custodian account, these accounts remain unaffected in case the company fails or goes into administration. Lastly, any investments made through Nutmeg are covered under the Financial Services Compensation scheme, which directly covers investments up to £50,000.
Who Will Find Nutmeg Useful for Their Investment Goals?
Nutmeg is an ideal trading platform for investors who are new as well as those who are pro but still would like to benefit from the knowledge of market experts. As with the Nutmeg app for Android, the investment process becomes a lot simpler, a quick glance at the various aspects of the app is enough to understand who is best suited to invest with this company.
When you create your Nutmeg account, you will need to fund in at least £500 to start operating your account. This amount is set as the minimum initial investment. However, if you would like to continue to invest below £5,000, then a minimum monthly contribution of £100 is required to ensure a growth factor in your investment portfolio. As mentioned above, Nutmeg is a suitable form of investment for any investor but it is true that this platform particularly attracts investors who are looking for a low-cost investment solution in stock markets, but either don’t have the expertise on stock market investment or are short on time due to their other professional engagements. In other words, investing in Nutmeg is ideal for those who are happy to take the risk of online stock market investment but do not have the time or expertise to control their online investments.
Nutmeg’s fees and charges
Being one of the cheapest online stock broker companies in the UK, the fees and charges of this trading platform are rather reasonable. The main aspect about the fees and charges of Nutmeg worth noting is the fact that the prices largely depend on the amount of overall investment made by the investor. The company is very transparent towards the fee structure, which is explicitly mentioned on the website of the company. Another thing that works in favour of the investors of Nutmeg is that the company slashed its prices in 2017 in an attempt to beat the competition. Here are some basic details of the pricing of Nutmeg:
- For an investment amount up to £100,000, the Nutmeg fully managed portfolio charges are at about 0.75% of the investment value and that of the Nutmeg fixed allocation portfolio is about 0.45% of the invested amount.
- For an investment amount ranging between £100,000 to £500,000, Nutmeg requires its investors to pay around 0.35% for a Nutmeg fully managed portfolio and 0.25% for the Nutmeg fixed allocation portfolio. The same rates apply to investment amounts beyond £500,000.
Apart from the above, there can be some underlying charges and market spread that covers for the trading costs of doing investment on behalf of the investors.
Nutmeg Managed Portfolios
As mentioned above, Nutmeg offers its investors a choice of 10 fully managed portfolios, with each of these 10 portfolios containing a different mix of stocks and shares. The portfolios have varying risk profiles ranging from being termed as ‘cautious’ to ‘aggressive’. Each portfolio contains investment assets that are from different global financial markets. This strategy adopted by the Nutmeg app diversifies the risk as well as providing an opportunity to the investors to trade in different global markets, thereby ensuring higher returns. The best thing about this portfolio investment strategy is the fact that the company regularly evaluates the performance of the various investment assets in each of the portfolios to maintain alignment with the risk profile of the portfolio to that of the investor. As the investors deal in a variety of investment assets such as shares and ETFs from different markets, the risk is very well distributed. Also, as there is more scope of returns from different markets instead of just relying on one investment instrument or one financial market, the investors do not have to worry about huge financial losses. The investment portfolios are easier to trade in than individual shares and stocks.
Nutmeg Fixed Allocation Portfolios
Another approach to portfolio investment by the Nutmeg app in the UK is the option to choose from the existing fixed allocation portfolios. The difference between the Nutmeg fully managed portfolio and the Nutmeg fixed allocation portfolio is the fact that in case of the fixed portfolio, the combination of investments assets is not altered based on the fluctuating market conditions. There are 5 fixed allocation portfolios with different risk profiles:
The fixed allocation portfolio is cheaper as it does not include the additional fee that is paid to use the expertise and services of the investment experts of Nutmeg. As the portfolio is not affected by the market conditions, the profits or returns from the investment are not too high. The fixed allocation types of investment portfolios are well suited for investors who are risk averse and are looking for a low-cost investment that does not require too much of their time for better returns. These investment portfolios have a certain fixed range within which they operate and the portfolio tends to self-rebalance in case of any significant diversion from the original risk profile based on market conditions. The fixed allocation portfolios are not available through the Nutmeg pension portfolios.
The Affiliate Program
Nutmeg offers an alternate opportunity to interested individuals to make money from the financial markets by becoming an affiliate of the company. If you have a website or have any other source that will allow you to garner the interest of potential online customers, it can be quite beneficial for you to try the option to become affiliates.
Affiliates can be individuals, businesses or websites that can offer something that helps the potential clients of Nutmeg, thereby attracting their attention towards their resource. These affiliates then encourage the potential clients who visit the portal of Nutmeg through a verified link that improves the chances of the company to find more investors, who will be interested in not just investing but further spreading the news. The company website offers the basic details of how a company interested in becoming an affiliate can contact the concerned person and begin at her earliest. With affiliate program, the risk of loss of investment does not exist as the affiliates do not require any minimum investment or funding of their investment account. Nutmeg also has a policy of profit sharing with its affiliates. This profit sharing tends to continue for as long as the investors introduced by the affiliate continue to invest with Nutmeg app Android.
When it comes to online investments and all aspects related to it, no matter how much support an investor receives from the stock broker company, having some basic information can be very handy. Even if the investor is dealing with the best broker, the investment goals can only be realised when the investor understands the basic gimmicks of the online trading and investing solutions. Nutmeg offers an extensive resource – the Nutmegonomics – that is enriched with all information related to trading online. Being informed and opinionated, investors can consider different portfolios, study the market conditions and make well-researched investment decisions.
The Nutmegonomics blog is an inspiration not just because it talks about the various approaches to study the different financial markets but also because it helps investors to get up-to-date market information from across the world. Investors can also check a sample portfolio or have the team at Nutmeg build a demo portfolio for them based on their risk level so that they can understand how to deal in real financial markets. This inspires confidence in the minds of all investors as they are empowered with information and are no longer investing without having even a basic understanding of the financial markets or the investment instruments they are dealing in.
Nutmeg – the breakdown
The process of registering with the Nutmeg trading app is very simple. Once you download the Nutmeg app on Android phone, or any other version as per compatibility with your device, you will need to create a trading account. After a basic verification of the account, the investors can fund their accounts and get started by purchasing their first investment portfolio.
If you are looking for a low-cost stockbroker and online investment service that is reliable, then the Nutmeg app is your answer. This is the option for you if you are looking for an investment service that is legit, tackles your investment decisions, creates your portfolio and manages it for you – all of that at rather low prices. Nutmeg is considered to be among the cheapest online investment services yet offers a reasonable return to its investors. Overall, the Nutmeg trading app is simple to use while providing competitive returns over a long period of time.
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