November 24, 2020

Nutmeg Launches ‘Smart Alpha’ Portfolios Powered by J.P. Morgan Asset Management

Nick Saving Money, Investing reviews 6 Comments

Updated 16 November 2023.

Regular readers of PAS will know that I am a fan of the Nutmeg robo-adviser investment platform, and have a good portion of my own money in a Nutmeg stocks and shares ISA. You can read my in-depth review of Nutmeg here.

I was interested to hear that Nutmeg had launched a new investment style for their ISA, Lifetime ISA, Junior ISA, SIPP (personal pension) and general investment account customers. Previously such customers had a choice of three options: Fixed Allocation, Fully Managed and Socially Responsible.

All Nutmeg portfolios are managed by human experts, but the Fixed Allocation ones are altered annually, whereas the others are managed more actively. The Socially Responsible portfolio aims to optimize your investments according to various environmental, social and governance (ESG) factors. So it focuses on companies with a good track record and proactive strategy in such areas as water use, pollution, greenhouse gas emissions, proportion of female board members, and so on. Currently my own stocks and shares ISA is in the Fully Managed category (which was the only option available when I originally invested with Nutmeg).

Whilst all three of these investment styles remain available, a new one was launched in 2020…

Smart Alpha Portfolios

Nutmeg’s Smart Alpha portfolio range is powered by J.P. Morgan Asset Management. It includes five risk-rated portfolios, each holding between 10 and 14 passive and active exchange traded funds (ETFs). They are run by J.P. Morgan’s multi-asset solutions team, giving Nutmeg clients access to the investment giant’s experience and expertise. Writing on the Nutmeg blog, their Chief Investment Officer James McManus explained the benefits of this approach as follows:

The name recognises the intelligent way these portfolios are designed with the potential to achieve alpha (returns above the market) for our clients in three ways.

Firstly: The use of J.P. Morgan Asset Management’s multi-asset specialists, a team with a 50-year history of investing for institutions and professionals worldwide. These specialists inform Smart Alpha portfolios’ long-term (strategic) asset allocation.

Secondly, Smart Alpha portfolios have the ability to be flexible around this long-term asset allocation, allowing us to manage risk and capture opportunities at different stages of the market cycle.

Thirdly: Nutmeg and J.P. Morgan Asset Management have added to these capabilities a means to make smart security selections within active exchange traded funds (ETFs). These smart selections are made based on the insights of J.P. Morgan Asset Management’s research analysts with the aim being to capture returns in excess of the market benchmark (alpha).

How do these smart selections seek to gain alpha? The active ETFs we use allow us to move overweight in certain positions that J.P. Morgan Asset Management’s analysts expect to perform well and underweight in those positions they expect to perform poorly. This gives us the ability to move above and below market benchmark positions, delivering greater potential returns with similar risk to the overall market.

As well as allowing Nutmeg investors to tap into the expertise of J.P. Morgan Asset Management, these portfolios are ESG integrated, meaning that (as mentioned above) environmental, social and corporate governance considerations are factored into every research and investment decision. These portfolios are therefore suitable for the growing number of investors for whom ethical considerations are particularly important.

The terms and conditions for the new Smart Alpha portfolios are copied below, alongside the other portfolio types.

The above is correct as at 16 November 2023, but may have changed subsequently. Please note also that Nutmeg has also recently introduced a new ‘thematic’ investment style. More information about this can be found about this in my full Nutmeg review and on the Nutmeg website. Remember that all investing carries a risk of loss.

My Thoughts

This is undoubtedly an interesting move by Nutmeg and gives investors the opportunity to benefit from having their portfolio actively managed by a leading investment house at no extra cost. If you are a Nutmeg investor already, you can start by investing as little as £500 to test the water. You can either use ‘new money’ from your bank account or another ISA, or you can transfer money from another pot within your Nutmeg ISA account.

Personally I am very happy with the way my Nutmeg ISA has performed during this tumultuous year and don’t want to rock the boat too much. On the other hand, I am curious to see how the new Smart Alpha portfolios perform in comparison. So I have created a new £1,000 pot within my ISA and have selected Smart Alpha as the investment style. The risk level is 4/5, which roughly corresponds with the 9/10 risk level in my Fully Managed portfolio.

I will of course report back on Pounds and Sense about how my investments perform. Obviously, if my Smart Alpha pot seems to be doing significantly better than my Fully Managed one, I will switch some or all of the latter to Smart Alpha as well. It is one of the attractions of Nutmeg that you can have multiple pots within a single ISA with different investment styles and risk levels attached to them.

Capital at risk. Tax treatment depends on your individual circumstances and may change in the future.

In Conclusion

I am obviously a fan of Nutmeg and – as stated above – have a significant proportion of my investments with them.

Of course, I am not a qualified financial adviser and everyone should do their own ‘due diligence’ (and/or take professional advice) before deciding to invest. In addition, you shouldn’t consider investing with Nutmeg (or anyone else) unless you have paid off any interest-charging debts and have at least three months of easily-accessible savings in case of emergencies.

Based on my personal experiences with Nutmeg, though, I am happy to recommend them. They provide a simple, easy-to-understand investment platform, the customer service is excellent, and certainly in my case the results to date have exceeded my expectations.

If you have any comments or questions about this post or Nutmeg in general, please do leave them below.

PLEASE NOTE: As with all investing, your capital is at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest.

Note also that I am not a qualified independent financial adviser and nothing in this review should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing and take professional advice if in any way uncertain how best to proceed. All investing carries a risk of loss.

Please note also that this review includes affiliate links. If you click through and make an investment or perform some other qualifying transaction, I may receive a commission for introducing you. This will not affect in any way the terms you are offered or any fees you may be charged.

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November 16, 2020

Win a Samsung 50-Inch Smart UHD TV in This UK Bloggers Christmas Giveaway!

Nick Everything Else competitions, events 0 Comments

2020 has been a stressful and difficult year, but here’s a chance to end it on a positive note. I’ve joined forces with some of my fellow UK bloggers to put together a giveaway with a Samsung 50-Inch Smart UHD TV for the lucky winner.

Read on to find out how you could win this amazing prize in time for Christmas. And please do check out the other talented bloggers who have collaborated on this giveaway.

Bloggers Taking Part

The Prize

One lucky winner will win themselves a Samsung 50 Inch UE50TU7100 Smart Ultra HD TV worth a whopping £400! This smart TV is compatible with the following smart apps: Now TV, Disney+, Netflix, BBC iPlayer, Amazon Prime and YouTube. It also has its own built-in Internet browser. To quote from the sales page:

Experience crystal clear colour HDR powered by HDR10+ as the film-makers intended. Crystal Processor adapts to provide the very best 4K picture and targeted sound based on what you are watching. Works with Alexa and Google Assistant. Slim design with very narrow bezel.

How to Enter

To enter simply complete all or any of the Rafflecopter entry options below. The more you complete the more chances you have of winning.

The competition ends at midnight on Sunday 13th December and a winner will be drawn on Monday 14th December. If for any reason the chosen prize is out of stock at the time of the draw, the winner will be able to select an alternative prize up to the same value.

For full entry terms and conditions please see the Rafflecopter widget below.

a Rafflecopter giveaway

One final small point is that if a winning entry comes from following someone on social media, the organizers will check before awarding the prize that the winner is still following the account in question. If they aren’t, they will be disqualified and a new winner drawn. So, please, don’t follow and immediately unfollow, as your entry won’t then count.

Good luck, and here’s hoping we can all look forward to a happier Christmas!

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November 9, 2020

How Universal Credit Claimants Can Get Free Energy-Saving Home Improvements via the Government’s Energy Company Obligation Scheme

Nick Saving Money events, property, sponsored post, benefits 6 Comments

The number of people applying for Universal Credit has surged to record levels as a result of the Coronavirus pandemic and the numbers are set to rise further with the ongoing economic uncertainty.

In addition to a loss of income, households could also be facing a rise in energy-bills due to more time spent at home and cold weather approaching. Many will be coming to grips with the benefits system for the first time and starting to understand the rules, regulations and complexities around making a claim.

However, there is a little known silver lining for these claimants. Anyone who has claimed Universal Credit successfully will also be eligible for home improvements under the Government’s Energy Company Obligation (ECO) scheme.

This current scheme, called ECO3, targets people that have high energy costs comparative to household income. The scheme has a list of ‘qualifying benefits’ for eligibility. Universal Credit is on that list.

Plus, there are no savings or income-tests for the qualifying benefit part of the application, so if you receive any benefit on the list below (excluding Child Benefit, as that has an income cap), it’s likely you’ll be eligible.

According to Ofgem (who administer the ECO scheme), claimants will still be eligible for a period of 18 months following the date of the letter for the Universal Credit award (page 44 of the Ofgem ECO3 guidance has full details).

So if, say, you were awarded your Universal Credit in April but you got a job last week and came off Universal Credit today (for example), you still have a significant period of time (a year and a half) to apply for and install the measure, as you would still be classed as eligible even when you return to work. While you can wait to apply, it’s advisable to apply sooner rather than later, as funding rules can change at any time.

Even if you have returned to work or are planning to return to work, you will still be eligible, providing you have had at least one award for Universal Credit.

And it isn’t just Universal Credit recipients who are eligible for grants. Also on the ‘qualifying benefits’ list are the following:

Armed Forces Independence Payment
Attendance Allowance
Carer’s Allowance
Child Benefit*
Child Tax Credit
Constant Attendance Allowance
Disability Living Allowance
Income Support
Pension Credit (Guarantee)
Employment and Support Allowance (income-related)
Jobseeker’s Allowance (Income-based)
Income Support
Industrial Injuries Disablement Benefit
Mobility Supplement
Personal Independence Payment
Severe Disablement Allowance
Universal Credit
War Pension Mobility Supplement
Working tax credit

* Note: If Child Benefit is the only qualifying benefit you receive, you will also need to meet additional income rules detailed here.

You will still be eligible if you return to work as you can claim for a period of 18 months after claiming benefits.

What Grants Are Available?

There are a range of energy-efficiency measures that can be installed under the Energy Company Obligation (ECO) scheme, including boiler upgrades, home insulation and heating upgrades. The Scheme is funded by the major energy companies and if you claim benefits, you are entitled to this funding.

Table: Measures Available Under the Energy Company Obligation Scheme

Measure	Homeowners	Private Tenants	Housing Association Tenants	Landlords	Council Tenants
Air Source Heat Pump (ASHP)	✅	✅	✅	❌ Landlords ✅ Private tenants can apply	❌
Boiler Upgrade or Repair	✅	❌	❌	❌	❌
Cavity Wall Insulation	✅	✅	✅	❌ Landlords ✅ Private tenants can apply	❌
Electric Heating Upgrade	✅	✅	✅	❌ Landlords ✅ Private tenants can apply	❌
First Time Central Heating (FTCH)	✅	✅	✅	❌ Landlords ✅ Private tenants can apply	❌
Internal Wall Insulation	✅	✅	✅	❌ Landlords ✅ Private tenants can apply	❌
Underfloor Insulation	✅	✅	✅	❌ Landlords ✅ Private tenants can apply	❌

How Much Could You Get?

The amount of funding available depends on a range of factors, including property type, your existing heating, wall type and potential energy savings from proposed work.

The first step in working out what you could get is to check your eligibility online. There’s a quick form on the Energy Saving Genie website where you can enter your details to see if you are eligible.

If you meet the criteria, you can choose to apply and once your application has been submitted, it will be passed to a Registered Installer.

The Registered Installer will arrange a free survey of your property. You can choose to proceed ASAP with a survey taking place following strict health and safety guidelines or you can choose to wait until after Covid-19.

Once the survey has taken place, the surveyor will report back to the Registered Installer, who will talk you through the grants that are available towards energy-efficiency measures at your property.

The grant is paid directly to the installer and they are awarded on lifetime savings (LTS) scores. Currently electric heated properties and larger properties tend to receive the most funding. But even if your home isn’t large or heated by electricity, it is worth applying as you could still receive a significant grant towards home improvements.

So if you are one of the many million new Universal Credit claimants due to Covid-19, you can start the process of applying for a home improvement grant that will knock £££s of your energy bills for years to come, well after the pandemic has passed.

Check your eligibility here!

Disclosure; This is an adapted reblog of an original post by Energy Saving Genie. It is also a sponsored post. If you click through and end up taking advantage of this government scheme, I will receive a fee for introducing you. This will not affect any products or services you may receive or the value of any grants you may be awarded.

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November 5, 2020

My Coronavirus Crisis Experience: November Update

Nick Investing, Everything Else events 3 Comments

Another month, another coronavirus crisis update. Regular readers will know I have been posting these updates since the first lockdown started (you can read my October update here if you like).

As always, I will discuss what has been happening with my finances and my life generally over the last few weeks.

Financial

I’ll begin as usual with my Nutmeg stocks and shares ISA, as from feedback received I know many of you like to follow this.

As the screenshot below shows, my portfolio has been on a roller-coaster ride over the last few weeks but is currently valued at £16,955, about £500 up on last month. Considering national and world events at the moment I am very happy with this. You can read my in-depth Nutmeg review here (including a special offer for PAS readers).

I haven’t mentioned my Bricklane Property ISA for a while, so I thought I should rectify that this month. As discussed in my blog review, Bricklane – not be confused with Brickowner – is a REIT (Real Estate Investment Trust). Investors’ money is pooled to purchase properties. Rental income is then distributed to investors, who also stand to benefit if the value of the REIT goes up. As you can see from the chart, though, this year the trajectory has been largely downward.

At first glance this looks alarming, but of course it’s important to note that the vertical axis of the graph goes from minus £200 to plus £200, so in reality the losses aren’t as bad as that scary-looking precipice might suggest. Allowing for the fact that I received a £100 welcome bonus when I signed up with Bricklane, overall I am about £80 down on my £5,000 investment. Of course, that’s not what you would hope for, but this has been a particularly tough year for anyone investing in property. Among other things, rising unemployment, company failures, more people working from home, and rising defaults on loans and mortgages (along with mandatory payment holidays) have all affected demand and reduced rental returns and property values.

A recent email from Bricklane gave further insight into the problems they are facing. It turns out that the Regional Capitals fund (in which I am invested) includes a number of properties that may need extensive refurbishment in light of the Grenfell Tower tragedy. As I understand it, they have cladding which needs assessing by specialists and may have to be removed and replaced. This is a time-consuming and costly business. Of course, the owners (who include me as an investor) have no option but to undertake this, and inevitably this is having an impact on the value of the fund.

This does of course illustrate that any investment in a single asset class such as property carries additional sector-specific risks compared with broader-based investments, and you may see greater volatility as a result. On the plus side, when investing in property your money is secured by bricks and mortar, so it’s very unlikely you will lose your shirt.

I guess if I was braver and had a longer time horizon, I might look at Bricklane as a value-investing opportunity just now. As it is, I am leaving my money where it is but won’t be investing any more with them for the foreseeable future. I am not planning to sell up as I don’t currently need the money and that would only crystallize my losses.

Otherwise there is nothing dramatic to report on the financial front. My two Buy2LetCars investments are still delivering the promised monthly returns without any hassle. To recap, investors with Buy2LetCars put up the money to finance a car for a key worker such as a nurse or police officer. They then receive 36 monthly capital repayments followed by a final balancing payment of interest and capital. I heard from the company today that they are allowed to continue trading in England’s second lockdown and are already experiencing an upsurge of enquiries from key workers needing transport. So if you are looking for an income-producing investment with a substantial lump sum payment after three years, they are well worth checking out (and likewise if you’re a key worker looking for a lease car yourself). If you’d like to learn more, you can read my review of Buy2LetCars here and my more recent article about the company here. And here is a link to Wheels4Sure, their car-leasing website.

My Property Partner and Kuflink investments are still both ticking along satisfactorily. Unsurprisingly there have been delays in repaying some of my Kuflink loans, but I continue to receive monthly interest payments on them and am not unduly concerned. As regards The House Crowd, I assume that the sales of the two properties in which I hold £1,000 shares are progressing, but can understand that it is a slow process. As with Kuflink, rental payments are still accruing, which should help to defray some of the selling costs.

There has been no further word either regarding my investments with Crowdlords. As I said last month, I have two remaining investments with them, Kennington Road eco-houses and Trent House. I was told they hope to have exit options for these properties by the end of the year, but I’m not holding my breath. On the plus side, they are paying 6 percent interest on my Trent House investment, which is quite generous in these days of ultra-low interest rates.

Personal

Thankfully this month has been less eventful for me than the previous one. Touch wood my left eye is recovering well after the laser treatment (thank you to those who have asked and/or sent me good wishes about this). I am going back to Burton Hospital in a week’s time for what I hope will be a final check-up.

I still have floaters in both eyes – worse in the left – but that is not unusual for people of my age. It’s annoying but not dangerous in itself, and there isn’t really any treatment (I understand lasers can be used in extreme cases to ‘blast’ them, but it’s rare to do this as it risks causing other damage). I did read online about a Chinese study which found that eating pineapple can help reduce floaters, so I was happy to have an excuse to eat more of this delicious fruit!

As I write this, England is going into its second lockdown. I am dubious about the wisdom of this and worried for people whose physical and mental health is likely to suffer, especially as it appears the second wave has already peaked and new case numbers are starting to fall.

I am at least thankful that the schools have been exempted this time. I live quite near a secondary school, and it lifts my spirit when I see the young people bursting out of the school gates at the end of the day. chatting to their friends, larking around, and generally doing all the things young people do. And not a mask in sight!

Today I am off to see my accountant to discuss my annual accounts. He works from home and neither of us was sure what rules applied in this situation, so in the end we agreed to meet outside on his front drive. At least this will help to ensure that the meeting doesn’t go on a minute longer than it needs to 🙂

I had a winter flu jab last month (the first time I’ve qualified for a free one as I reach 65 later this year). It seemed a sensible thing to do, especially as it may give some protection from Covid too. I did have a reaction to it, though. I woke up at around 2 am shivering violently, and then I started to get nausea as well. By morning I was feeling a lot better, apart from having had almost no sleep. Apparently these are quite common side effects of the vaccine, though two friends (both older than me) didn’t get any effects at all.

I went for my last pre-lockdown swim on Tuesday. The centre was busier than usual, so I guess I wasn’t the only one who decided to take the opportunity while it was still available. I am very disappointed that pools have been made to close again as there is no evidence the virus is spreading this way and many people (me included) depend on swimming for our physical and mental health. I just hope they reopen at the start of December and the lockdown isn’t extended. Personally I expect the numbers of new cases to continue falling over the next few weeks, not due to the lockdown but simply because that is the trend now. If that is the case, there will be no excuse for prolonging the lockdown. But I guess by the time of my December update we will know one way or the other!

Finally I am still dutifully completing the UCL Virus Watch weekly questionnaire saying whether I have any possible Covid symptoms (none so far). And I am still waiting to hear when I will be able to take the blood test to see if I have any antibodies or other natural resistance to the virus. But I gather they wouldn’t be able to do that until a few weeks have elapsed after the flu jab anyhow, so it may be just as well I’ve heard nothing yet.

So that’s it for this month really. I hope you and your loved ones are staying safe and well. As always, if you have any comments or questions about this post, please do leave them below.

Disclosure: This post includes affiliate links. If you click through and make a purchase, I may receive a commission for introducing you. This will not affect the price you pay or the product or service you receive.

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