What is Nutmeg?
Nutmeg is an online investment platform based in the U.K. that offers a user-friendly experience for investors, allowing them to grow their money by investing in a mix of assets. It was founded in 2011 by Nick Hungerford and William Todd. It was designed to remedy the problems they saw in the investing world, like the following.
- Lack of transparency
- High management fees
- Too much technical jargon
- Too exclusive
- Lack of simplicity
By getting rid of the bad aspects of wealth management, Nutmeg was able to grow exponentially. This growth has allowed the company to build up a specialist team of experts to help manage clients’ portfolios. These factors, in conjunction with its customer-focused business model, have earned them some important accolades over the years. Here are a few examples:
- Endorsement from the U.K. government
- Average customer referral of 2 or more
- Awarded best buy ISA in 2023 by Boring Money
- YourMoney.com Investment Awards 2024, which recognise financial firms excelling in product innovation, user experience, and customer support.
So it’s fair to say Nutmeg knows a thing or two about looking after and growing your money. That said, is it the right fit for you? Let’s dive deeper into all things Nutmeg and find out.
Nutmeg at a Glance
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Portfolio options
When it comes to investing your money with Nutmeg, you have a variety of portfolios to choose from that are in line with your risk tolerance. Once you’ve undertaken the test and determined your risk profile—you can choose from 5 risk levels, low to high—then you can select which portfolio version you would like. Choose from the following options.
- Fixed-allocation portfolios
- Fully managed portfolios
- Socially responsible portfolios
- Smart alpha portfolios
- Thematic investments
According to Nutmeg, setting up your portfolio only takes 10 minutes, and after that, you can leave it to their staff. This seems very much in line with the company’s philosophies about making investing simple and accessible that I touched on earlier. Before we move on with this Nutmeg investment review, let’s take a look at each portfolio in some more detail.
Fixed-allocation portfolios
Fixed-allocation portfolios are the automated option of the bunch, making them suitable for individuals looking for very low management fees. You’ll also benefit from a globally diversified portfolio that is initially selected by a team of professionals. This portfolio will then be reviewed annually by an expert, eliminating the need for higher costs typically associated with fully managed portfolios.
Nutmeg’s automatic rebalancing software will handle your investments for you. Nutmeg refers to this approach as a ‘set-and-forget’ style. The difference lies in the scientific approach used to establish the portfolio.
Fully managed portfolios
When it comes to fully managed portfolios with Nutmeg, you have the option of 10 different variants. Which one you choose will be down to your risk tolerance. This portfolio style is aligned with someone who wants qualified experts to have a hands-on approach to their investment money.
The portfolio consists of ETFs, which essentially give the investor exposure to a pool of investments. The benefit of this is you don’t have to buy each stock individually, which is widely considered to be a higher-risk play.
So, you’ll have a diversified portfolio that experts regularly manage. This means that a member of the team can make strategic changes to your investments based on news, etc. Of course, this comes at the price of a higher management fee (more on this later).
Socially responsible portfolios
Just like fully managed portfolios, you have the option of 10 different socially responsible variants to choose from. Socially responsible portfolios simply mean portfolios that consider environmental and ethical factors above all else.
Again, the portfolio will consist of ETFs but with companies that aren’t undertaking ‘controversial activities’. Management will be ongoing, meaning you can kick back and relax knowing your money is in the hands of experts.
That also means tweaks and strategic adjustments may be made if experts see it beneficial to do so.
Smart alpha portfolios
Smart alpha portfolios were made possible through Nutmeg’s recent allegiance with J.P. Morgan. This portfolio combines Nutmeg’s core investing principles with J.P. Morgan’s extensive asset management expertise.
It will contain a mixture of ETFs but is unique to the other portfolios in that it introduces research-driven security selection. Many active and innovative ETFs will also be incorporated into the portfolio, drawing on J.P. Morgan’s experience in this field.
Management is ongoing but will merge experts from Nutmeg and J.P. Morgan together to monitor your investments.
Thematic investments
Thematic investing with Nutmeg is designed for long-term investors interested in trends driving structural changes like technological shifts and demographic trends.
This investment style is actively managed by Nutmeg’s experienced investment team, who rebalance portfolios regularly and make strategic adjustments. This style is available for risk level 5 and above, with a portion of the portfolio dedicated to the chosen theme.
Investment products
Nutmeg is not limited to portfolio management and, in fact, offers a nice range of investment products. These investment products/accounts are all available with the portfolio styles stated above. Let’s briefly take a look at each one.
Stocks and shares ISA
Nutmeg offers a stocks and shares ISA, which will be monitored ‘in-house’ by experts at Nutmeg. All you need to do is to check Nutmeg’s investment review to choose your investment style and take a test to establish your risk tolerance, and you’re good to go. The perks of opening up a stocks and shares ISA with Nutmeg are:
- Set up monthly deposits into your account.
- Open an account with £500 or more.
- Highly transparent—you’ll know exactly where your money is invested.
- There are no exit fees.
- Easily change your investment style and/or risk tolerance via the app.
- You have 24/7 access to your account.
These are just a few reasons why Nutmeg is a popular option when it comes to stocks and shares ISA providers, as it has won multiple awards.
General investment account
A general investment account is exactly what it sounds like. This investment product is typically used when someone has reached their £20,000 yearly deposit limit in their stocks and shares ISA.
Therefore, a general investment account acts as another way to invest your funds in the market. However, the key difference is that, unlike a stocks and shares ISA, your returns are subject to tax (which currently sits at 20%).
But, just like the stocks and shares ISA, your experts will pick the portfolio, but it will still be easily accessible and globally diversified.
Personal pension
Putting aside the technical jargon, a pension is simply a tax-efficient way of saving for your retirement. Here is a look at some of the key features of Nutmeg’s pension accounts:
- You must be over 18 and under 75 years old
- Start with as little as £500
- Receive a 25% top-up from the government
- Your pension will be designed by experts
- It’s easy to transfer an existing pension over to Nutmeg
- Enjoy 24/7 access to your account
- Take advantage of pension drawdowns.
Please note that pensions with Nutmeg are no different from conventional personal pension accounts in terms of rules and guidelines.
Lifetime ISA
The Nutmeg Lifetime ISA is a government initiative aimed at individuals aged 18 to 39 to encourage saving for their first home or retirement. Here are some key features of the Nutmeg Lifetime ISA:
- Receive a 25% government bonus up to a maximum of £1,000
- Save up to £4,000 per tax year
- Funds in a Lifetime ISA can be withdrawn tax-free either to purchase a first home (up to £450,000), after the age of 60
- Diversified portfolios managed by experts
- Transparent and no hidden costs.
Overall, the Nutmeg Lifetime ISA provides individuals with a tax-efficient way to save for their first home or retirement, with the added benefit of government bonuses and investment options managed by experts.
Junior ISA
Junior ISAs are a long-term, tax-efficient way of investing in your child’s future. Just note that the child you are opening an account for must be under the age of 16. You have complete control of the account until they reach 18, when it will be fully transitioned over to them.
The current limit for deposits into the account for this upcoming tax year is £9,000 (ending 5th April 2024). Although funds cannot be removed from the account until the child reaches the age of 18 (unless a significant event occurs), any gains are not taxed.
Junior ISAs with Nutmeg include features like:
- Start with as little as £100
- Your account will be designed by experts
- There are no exit fees
- You can change your risk tolerance and/or investment style at any time.
Account fees
As I stated earlier, one of Nutmeg’s key aims was to demystify the world of investing. They have achieved this by being completely transparent about their fees. These fees are split into the following three categories.
- Investment fund fees
- Management fees
- Market spread fees
Most wealth management companies also charge for things like investment performance fees, exit charges, and entry charges. However, investments with Nutmeg exclude all these additional ways to take clients’ money, which is good news for its investors.
Let’s look at the fees involved in each account side by side to give us a clearer picture of how much it would cost you.
| Fixed Allocation | Fully Managed | Thematic Investing | Socially Responsible | Smart Alpha | |
| General Investment Account | – 0.45% up to £100k
– 0.25% on portion beyond – Fund costs: £42/ 0.21% – Market spread: £8/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £44/ 0.22% – Market spread: £8/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £52/ 0.26% – Market spread: £18/0.09% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £62/ 0.31% – Market spread: £8/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £72/ 0.36% – Market spread: £8/0.04% |
| Stocks & Shares ISA | – 0.45% up to £100k
– 0.25% on portion beyond – Fund costs: £42/ 0.21% – Market spread: £8/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £44/ 0.22% – Market spread: £8/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £52/ 0.26% – Market spread: £18/0.09% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £62/ 0.31% – Market spread: £8/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £72/ 0.36% – Market spread: £8/0.04% |
| Personal Pension | – 0.45% up to £100k
– 0.25% on portion beyond – Fund costs: £189/ 0.21% – Market spread: £36/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £198/ 0.22% – Market spread: £36/0.04% |
N/A | – 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £279/ 0.31% – Market spread: £36/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £324/ 0.36% – Market spread: £36/0.04% |
| Lifetime ISA | – 0.45% up to £100k
– 0.25% on portion beyond – Fund costs: £8.40/ 0.21% – Market spread: £1.60/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £8.80/ 0.22% – Market spread: £1.60/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £10.40/ 0.26% – Market spread: £3.60/0.09% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £12.40/ 0.31% – Market spread: £1.60/0.09% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £14.40/ 0.36% – Market spread: £1.60/0.04% |
| Junior ISA | – 0.45% up to £100k
– 0.25% on portion beyond – Fund costs: £18.90/ 0.21% – Market spread: £3.60/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £19.80/ 0.22% – Market spread: £3.60/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £23.40/ 0.26% – Market spread: £8.10/0.09% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £27.90/ 0.31% – Market spread: £3.60/0.04% |
– 0.75% up to £100k
– 0.35% on portion beyond – Fund costs: £32.40/ 0.36% – Market spread: £3.60/0.04% |
As you can see, the fees in proportion to what you get are perfectly reasonable.
Nutmeg’s performance
Throughout this Nutmeg review, we have examined portfolio styles and the various investment products offered by Nutmeg. It makes sense to them look at the data from the past few years and Nutmeg’s performance in 2024. After all, returns are often a crucial factor for many people when deciding which wealth management company to choose.
Below you can look at Nutmeg’s returns by all risk tolerances (1 being the lowest risk). (Note: These returns are from the inception of each portfolio type respectively and simulated results based on Nutmeg’s trading data).
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Fixed Allocation | +9.5% +2.4% AR* | +17.3% +4.2% AR* | +22.2% +5.4% AR* | +26.1% +6.2% AR* | +30.7% +7.2% AR* | N/A | N/A | N/A | N/A | N/A |
| Fully Managed | +7.7% +0.9% AR* | +23.0% +2.5% AR* | +32.8% +3.5% AR* | +42.4% +4.4% AR* | +51.8% +5.2% AR* | +58.4% +5.7% AR* | +71.6% +6.8% AR* | +81.9% +7.5% AR* | +93.8% +8.3% AR* | +100.4% +8.8% AR* |
| Socially Responsible | +2.2% +1.0% AR* | +7.4% +3.2% AR* | +10.7% +4.6% AR* | +13.8% +5.9% AR* | +15.6% +6.6% AR* | +17.0% +7.2% AR* | +17.7% +7.5% AR* | +19.5% +8.2% AR* | +20.9% +8.8% AR* | +22.0% +9.2% AR* |
| Smart Alpha | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
* These figures represent the annual compound rate.
Is Nutmeg safe?
Nutmeg keeps your investments safe by utilising what’s known as a custodian bank. A custodian bank, put simply, is a specialised financial institution that safeguards securities.
Nutmeg just so happens to use State Street, which is one of the largest custodial banks in the world.
Your investments will be held in a segregated account, protecting you from the unlikely event that either Nutmeg or State Street goes bust.
In the event Nutmeg can’t fulfil its obligations, any investments you have up to £85,000 are protected by the Financial Service Compensation Scheme (FSCS).
It should also be noted that your funds are protected from being lent to third parties, adding another layer of security.
So it’s fair to say that Nutmeg takes the safety of your money very seriously.
Nutmeg reviews
As with all my reviews, I like to include outside opinions to arrive at a more well-rounded conclusion. When checking out Nutmeg’s Trustpilot page, you’ll see they are rated ‘great’ overall.
Positive Nutmeg reviews highlight benefits like transparency, great customer support, ease of use, and simple investment options.
Negative Nutmeg reviews tend to be centred around the withdrawal time of funds. Average refunds via the Nutmeg app take between 3-7 days, which is a fair transition time.
However, I can understand if you need the money quickly for emergencies or a big event such as buying a new house.
What advantages does Nutmeg provide for investors?
As one of the largest digital wealth managers in the U.K., Nutmeg provides user-automated, advanced algorithm-driven investment strategies. It provides various account types, including Individual Savings Accounts (ISAs), Junior ISAs, and pension accounts. Hence, you can set different financial goals and tailor your investment portfolios to align with those goals.
You can get regular updates on your portfolio performance and follow them to improve your financial awareness. Going deeper into its advanced features, you can use the best investment options, considering your financial goals and risk tolerances.
Due to intelligent strategies, cutting-edge technology, and data-driven approaches, you can optimise your portfolio performance.
What should you expect?
- Transparent fee structure
- Goal-oriented investing
- Robo-advisory technology
- Flexible account options
- Responsive customer support.
Nutmeg FAQs
Is my money safe with Nutmeg?
Your assets are protected by the Financial Services Compensation Scheme (FSCS). So yes, your money is safe with Nutmeg and protected in the event they go bust.
Who can invest in Nutmeg?
Anyone can invest in Nutmeg – all you need is £100 to start if you are opening up a Junior ISA or Lifetime ISA. If you are looking to invest in any other investment products Nutmeg offers, you’ll need £500 to start with.
Is Nutmeg good for beginners?
Nutmeg is good for beginners who want a ‘hands-off’ approach to investing. In other words, if you’d like your portfolio managed by experts and not have to do any work yourself, Nutmeg could be a good option for you.
Can you buy shares on Nutmeg?
Yes, you can open a Stocks & Shares ISA with Nutmeg or transfer an existing one to them.
However, since the portfolio is managed, you don’t buy the shares yourself.
How does Nutmeg make money?
Nutmeg makes money through fees charged for managing customers’ investment portfolios.
Is Nutmeg better than Moneybox?
Both offer a similar service, but Nutmeg offers a wider variety of options – both in terms of investment vehicles and individual tolerance to risk.
Is it possible to reinvest returns with Nutmeg?
Yes, Nutmeg provides investors with the option to reinvest returns. Instead of withdrawing gains, users have the choice to automatically reinvest them. This approach offers second-income opportunities.
Final thoughts on this Nutmeg review
Drawing this Nutmeg review to a close, I hope you’ve found this article interesting. Once more, you have a much better idea about whether Nutmeg is a good fit for you. They provide many investment products—some of which have won awards—with positive feedback from clients on the whole.
That being said, is it for everyone?
From my assessment, it seems to be a good fit for people who fulfil one or more of the criteria below.
- You are new to investing.
- You don’t want to manage a portfolio.
- You’d rather experts handle your money.
- Looking for a personalised and professional experience.
Overall, Nutmeg is a solid choice when it comes to digital wealth management.
If you enjoyed this Nutmeg review, please feel free to leave a comment down below and tell me your thoughts on Nutmeg.
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Until next time!