Nutmeg launches ETF-based fixed allocation portfolios

Jan 11th, 2017 | By | Category: ETF and Index News

Online wealth manager Nutmeg has announced the upcoming launch of a new investment range of fixed allocation portfolios, becoming the first digital investment firm to offer both a fixed allocation product and a managed portfolio service.

Martin Stead, CEO of Nutmeg.

Martin Stead, CEO of Nutmeg.

Each of the five to-be-unveiled fixed allocation portfolios will provide the same globally-diverse, multi-asset exposure, through the exclusive use of exchange-traded funds, as the firm’s current fully-managed portfolios. Unlike the existing actively managed portfolios however, after initial set up, the team leaves the portfolio to do what it has been designed to do, with no on-going strategic intervention.

For an annual fee of 0.45%, or 0.25% for investments above £100,000, investors will receive a diversified portfolio with free dividend reinvestment, automated rebalancing, and no extra or hidden costs like trading fees, transaction charges, or exit fees. Customers will still need to pay underlying fund charges, which range between 0.13% – 0.22% per annum.

Portfolios are designed and optimised to reduce risk, while gaining exposure to a wide range of asset class returns. Equity exposure is to a broad range of large, mid and small company stocks, not just in major markets like the US, but also in the Eurozone, Japan and emerging markets. Highlighting the diversity of holdings, portfolios may hold up to 10,000 underlying securities across 45 equity markets and fixed income from 92 countries.

Martin Stead, CEO of Nutmeg, commented: “Our new fixed allocation portfolios will particularly appeal to experienced investors with a long-term mind-set. Customers will be able to choose from five professionally designed portfolios, diversified across a range of geographies and asset classes, with automated rebalancing to keep their investments in line with their risk profile. At a starter rate of just 0.25% – 0.45%, this will be of real interest to anyone currently self-managing their investments on an execution-only DIY platform.”

The portfolios will be available from 16 January 2017. Investors may access the new products with as little as a £500 minimum investment.

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