October 23, 2023

Nutmeg Review: My Experiences with this Robo-Adviser Investment Platform

Updated 21 May 2024

In April 2016 I invested some money with the Nutmeg investment platform. It turned out to be one of my better investments, so in this update I thought I’d say a bit more about it.

What Is Nutmeg?

Nutmeg is a low-cost online investment platform. It is aimed at people who want to invest to take advantage of the potentially better returns, but don’t want the hassle of researching every investment themselves. Nutmeg has 200,000 investors as of May 2024 and over £5 billion in Assets Under Management (AUM).

With Nutmeg you simply choose the type of account you want and your investment style and how long you want to invest your money for (you don’t have to stick to this, of course, although they recommend to remain invested for at least 3 years). You can deposit a lump sum and/or set up monthly payments. Nutmeg then invests your money in a range of Exchange Traded Funds (ETFs).

For those who don’t know, ETFs are a package of shares from a particular section of the stock market. For example, an ‘Asia Pacific ETF’ is a collection of shares from the Asia-Pacific region. ETFs are different to most investment funds in that they don’t usually have a manager running them. Instead, most ETFs are run by computers that regularly balance their portfolios automatically. This helps keep costs low, though there is of course no guarantee of returns. You can learn more about ETFs here if you wish.

Nutmeg currently has five different types of investment product on offer. They are as follows:

ISA (individual Savings Account) – These accounts have to be funded from your after-tax income, but they grow tax efficiently and withdrawals are free of tax. Everyone has a maximum annual ISA allowance, which is currently a generous £20,000.

SIPP (Self Invested Personal Pension) – A SIPP has the big attraction that you get tax relief on your contributions, so the government effectively tops up every contribution you make. On the downside, you can’t withdraw money from a SIPP until you are at least 55, and only a quarter of the money you withdraw is tax-free, with the balance counting towards your total taxable income.

Lifetime ISA – A Lifetime ISA, sometimes called a LISA for short, is a tax-efficient vehicle launched in 2016. You can use a LISA for one of two specific purposes – buying your first home or saving for retirement. You have to be under 40 to open a Lifetime ISA. The government will then top up any contributions you make with an extra 25%. The maximum you can contribute to a LISA is £4,000 per year.

Junior ISA – A Junior ISA is an ISA opened by a parent or guardian on behalf of a child under 18. In the 2022 to 2023 tax year, the savings limit for Junior ISAs is £9,000.

General Investment Account (GIA) – This is for when you have used up all your other tax-free allowances. You can use this for whatever you like, but there are no tax benefits or top-ups.

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

My Own Experience

I invested £6,188 in a Fully Managed Nutmeg Stocks and Shares ISA in April 2016. If you’re wondering why it was such an odd sum, I put in £6,000 from my savings. The other £188 came from another small ISA account I thought I might as well transfer at the same time.

I was pleased by how my initial investment performed, so in April 2018 I transferred £4,000 from another stocks and shares ISA that had been under-performing. By January 2020 my investment had grown by £3,377 to £14,291. Here’s a chart showing how my investment performed up to 17th January 2020.

I accepted a high risk level (9/10) with this account, which may partly explain the performance achieved.

A few months ago I did a ‘deep dive’ into performance stats for Nutmeg fully managed portfolios from level 1 (lowest risk) to level 10 (highest risk). This confirmed that risk level does actually make a big difference to results obtained. You can read my article about this here and I strongly recommend that you do so if you are considering investing with Nutmeg. Obviously everyone needs to make their own decision about what level of risk they are comfortable with – but looking back over the last 10 years (since Nutmeg started) the higher the risk level you chose, the better the results you would have obtained over any three-year or longer period. Of course, past performance is no guarantee of what will happen in future, but it is certainly food for thought.

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

2020 – Year of the Virus

In 2020 the markets were thrown into turmoil by the world-wide coronavirus pandemic. Inevitably, my Nutmeg portfolio was affected by this. Here is a chart showing performance from January to December 2020…

As you can see, through late February and March my Nutmeg ISA plummeted in value, going from around £14,000 to just over £10,000. That was obviously a worrying time, but nonetheless I decided to risk investing another £3,000 when the markets were (as things stand now) near their lowest ebb.

From late March – and even allowing for my £3,000 top-up – my ISA made a remarkable recovery. By mid-December 2020 it was worth £18,323. Even if you take off the extra £3,000, that means my portfolio as a whole was worth over £1,000 more than it was before the pandemic struck.

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

2021 – Lockdown and Recovery

My Nutmeg ISA continued on a largely upward trajectory in 2021. Here is a screen capture showing how it stood at the end of December 2021. As you will see, Nutmeg have changed how performance is displayed on the website slightly.

I added a further £400 to my ISA eariy in the year. But even if you deduct this, the total fund value rose to £21,875.63, an increase of £3552 (over 21%) since December 2020.

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

2022 – Ukraine and Cost of Living Crisis

2022 was a challenging year for my Nutmeg investments. A variety of factors – including the war in Ukraine, rising inflation and the aftermath of the pandemic – have caused turmoil in world markets, and Nutmeg was obviously not immune. This is how my main portfolio performed in the year to 30 December 2022.

As you can see, my portfolio fell In value from £22,275.63 to £19,897.92. That’s a drop of £2377.71 or 10.68%.

That’s clearly disappointing, but it’s worth noting that it is still a lot less than the amount by which it went up in 2021. And at that point I was still over £5,500 in profit overall. I was therefore philosophical about this, recognizing that all investments have their ups and downs, and Nutmeg was hardly alone in seeing a drop in values in 2022. But I do understand why people who only started investing with them at the start of 2022 may have felt disappointed.

Quick update: As of 21 May 2024 the value of my main Nutmeg portfolio has risen to £24,249, an increase of £4,352 (21.44%) since 1 January 2023.

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

Nutmeg Fees and Investments

Nutmeg charge a fee of 0.75% a year on Fully Managed portfolios (see Portfolio Options, below) of up to £100,000, and 0.35% on investments beyond that. That’s competitive compared with traditional mutual funds, although you can find cheaper investment opportunities and platforms if you look around. You may or may not get such good overall results, of course.

A reader asked if Nutmeg reveal what ETFs your money is invested in. The answer is that they do. In case you are interested, here is a list from the website showing how my money is invested. Note that these are the top 12 funds. There are others in my portfolio as well, but this was the most I could capture in one screengrab 🙂

As a matter of interest, here is a copy of the table showing how the investments in my portfolio are allocated by asset class.

As you will see, quite a large proportion of my portfolio is invested in equity markets. As I said earlier, I opted for a high-risk, high-returns strategy. If I had chosen a lower risk level, a larger proportion would undoubtedly be in bonds and cash. Note that high-risk can also mean higher loss.

You can make changes to the risk level and investment style of any Nutmeg pot at any time. Nutmeg do just caution that making frequent changes to your portfolio may impact your returns. So they suggest you review your risk level when your goals change and avoid trying to ‘time’ the market.

It’s also worth noting that Nutmeg invests mainly in accumulation rather than income-generating funds. Most do not produce dividends, and with those that do, the money is automatically reinvested back into your portfolio. Nutmeg is really intended for people who are aiming to build a ‘pot’ – a nest-egg, if you prefer – rather than looking for a source of income. But you can of course sell all or part of your investment at any time.

Capital at risk. Past performance is not a reliable indicator of future performance.

Portfolio Options

Since I first signed up, Nutmeg have added some other options to their offering. In particular, they now offer five different types of ISA portfolio: Fixed Allocation, Fully Managed, Thematic (launched 2023), Smart Alpha, Socially Responsible and Fixed Allocation. To save time, I have copied the information on the Nutmeg website about each of these portfolio types below. Note that by default the estimated total fees per year refer to a portfolio worth £5,000. You can change this if you wish by entering a new figure at the top.

Please note that the figures above are correct as of 19 March 2024 but may have changed subsequently. As you will note, the Fixed Allocation portfolio has lower charges than the other three.

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.

Nutmeg’s Smart Alpha portfolios are powered by J.P. Morgan Asset Management. They include five risk-rated portfolios, each holding between 10 and 14 passive and active ETFs. They are managed by J.P. Morgan’s multi-asset solutions team, giving Nutmeg clients access to the investment giant’s experience and expertise. You can read more about the Smart Alpha range in this blog post. The new Nutmeg Thematic Investments are discussed in more detail further down.

As mentioned above, my own ISA is in the Fully Managed category (the only one available when I opened my account). I have considered switching to Socially Responsible, but as my investment has performed well overall I am reluctant to rock the boat. You might see this differently, of course.

I did, though, create a new pot within my ISA with 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 started in December 2020 with £1,000 and as all was going well added a further £1,000 in April and another £500 in June. By the end of 2021 my Smart Alpha portfolio was worth £2,837. That is an increase of £337 or around 13% expressed as an annual rate. In February 2022 I added another £500, bringing my total investment to £3,000. During 2022, like most stock market investments, the value of my SA portfolio fell back, but like my main portfolio it has recovered in 2023. At the time of writing (16 November 2023) it is worth £3,361, a net increase on capital of £361 (12.03%). Considering how turbulent the last two years have been for investors, I am happy enough with that.

I will of course continue to report on PAS about how my Nutmeg investments perform. Obviously, if my Smart Alpha pot seems to be doing significantly better than my Fully Managed one, or vice versa, I will switch my money between them. I am also considering investing in a new thematic investment pot. 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. Past performance is not a reliable indicator of future performance.

New: Nutmeg Thematic Portfolios

As of 23 October 2023, Nutmeg introduced a new portfolio option. Nutmeg’s Thematic Investment style gives you a globally diversified, risk adjusted portfolio with a tilt (up to 20% of equity exposure) towards your chosen theme. They say the majority of the portfolio will be actively managed by Nutmeg’s investment team, whilst the ’tilted’ part of the portfolio will be made up of ETFs that the investment team believes will deliver the best returns from the growth of the trend in question (to be reviewed annually).

Currently three themes are available, these being Technical Innovation, Resource Transformation and Evolving Consumer. For more details about what each of these comprises, check out the Nutmeg website.

Nutmeg thematic portfolios are only available on Risk Level 5 or above. There is a minimum investment of £100 for Junior ISAs and Lifetime ISAs or £500 for stocks and shares ISAs and pensions. There is a 0.75% management fee.

Thematic investing carries specific risks and is not for everyone.

Withdrawing Money From Nutmeg

You can withdraw any or all of your money from your Nutmeg ISA at any time on request. Investments are sold on a twice-weekly cycle, so depending on when you submit your request Nutmeg say it will typically take 3-7 business days for the money to appear in your bank account. This means the value of your investments may change during this period, and you might not therefore receive the exact amount requested.

If you are withdrawing from an ISA, it’s important to remember that any allowance used in the current tax year will remain used; you won’t get it back if you later pay back into your ISA. As mentioned earlier, everyone has a generous annual £20,000 ISA allowance, so this rule may or may not be of concern to you.

Other types of account such as SIPPs and Lifetime ISAs have specific legal restrictions on withdrawals set down by the government, e.g. you can’t normally withdraw money from a SIPP until you reach the age of 55.

In Conclusion

I am obviously a fan of Nutmeg and – as I said above – plan to continue investing with them. Of course, I am not a qualified financial adviser and everyone should do their own research (and/or take professional advice) before deciding to invest with Nutmeg. Based on my own experiences, 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 achieved have been good (even allowing for the downturn last year).

Nutmeg also has an excellent mobile phone app with an App Store average rating of 4.8 (16K reviews) and a Google Play Store rating of 4.3 (2.6K reviews). On the independent Trust Pilot website Nutmeg averages 3.9 stars (‘Great’). This figure fell a bit as some members expressed dissatisfaction with the performance of their portfolios last year during the cost-of-living crisis. It is, though, worth noting that 69% of Trust Pilot reviewers still give Nutmeg the maximum 5 stars (‘Excellent’) rating. All figures and ratings are correct as of 21 February 2024.

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 posts on Pounds and Sense may include 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.

This is a fully updated repost of my original Nutmeg review.

If you enjoyed this post, please link to it on your own blog or social media:

October 2, 2023

My Investments Update – October 2023

Nick Investing events, reviews 0 Comments

Here is my latest monthly update about my investments. You can read my September 2023 Investments Update here if you like

I’ll start as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below for the year to date shows, my main Nutmeg portfolio is currently valued at £20,945. Last month it stood at £21,188 so that is a fall of £243.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,295 compared with £3,325 a month ago, a fall of £30. Here is a screen capture showing performance since the start of this year.

The net value of all my Nutmeg investments has fallen this month by £273 or 1.11% month on month. That’s obviously a bit disappointing, but both pots are still comfortably up on where they were at the start of the year. Their total value has risen by £1,320 (5.76%) since 1st January 2023.

Of course, all investing is (or should be) a long-term endeavour. Over a period of years stock market investments such as those used by Nutmeg typically produce better returns than cash accounts, often by substantial margins. But there are never any guarantees, and in in the short to medium term at least, losses are always possible.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my overall experience over the last seven years, they are certainly worth considering. They offer self-invested personal pensions (SIPPs) and Junior ISAs as well.

I also have investments with the property crowdlending platform Kuflink. They continue to do well, with new projects launching every week. I currently have around £2,000 invested with them in 15 different projects paying interest rates typically around 7%. I also have just over £100 in my cash account after another loan was recently repaid.

To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question.

As mentioned last time, Kuflink recently changed their terms and conditions. As from Monday 21st August there is an initial minimum investment of £1,000 and a minimum investment per project of £500.

Kuflink say they are doing this to streamline their operation and minimize costs. I can understand that, though it does mean the option to ‘test the water’ with a small first investment has been removed. It will also make it harder for small investors (like myself) to build a well-diversified portfolio on a limited budget. As mentioned, my current portfolio of £2,145 comprises 17 different investments ranging from £50 to £200. If I was starting out again now, that same amount of money would only stretch to four deals!

One possible way around this is to invest using Kuflink’s Auto/IFISA facility. Your money here is automatically invested across a basket of loans over a period from one to three years. The rates on offer from August 1 2023 are shown in the graphic below.

As you may gather, you can invest tax-free in a Kuflink Auto IFISA. Or if you have already used your annual iFISA allowance elsewhere, you can invest via a taxable Auto account. You can read my full Kuflink review here if you wish.

Moving on, my Assetz Exchange investments continue to generate steady returns. Regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated a respectable £141.06 in revenue from rental income. As I said in last month’s update, capital growth has slowed, though, in line with UK property values generally.

At the time of writing, 8 of ‘my’ properties are showing gains, 2 are breaking even, and the remaining 16 are showing losses. My portfolio is currently showing a net decrease in value of £31.41, meaning that overall (rental income minus capital value decrease) I am up by £109.65. That’s still a decent return on my £1,000 and does illustrate the value of P2P property investments for diversifying your portfolio. And it doesn’t hurt that with Assetz Exchange most projects are socially beneficial as well.

Obviously the fall in capital value of my AE investments is disappointing. But it’s important to remember that until/unless I choose to sell the investments in question, it is largely theoretical, based on the most recent price at which shares in the property concerned have changed hands. The rental income, on the other hand, is real money (which in my case I have chosen to reinvest in other AE projects to further diversify my portfolio).

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned (especially now that Kuflink have raised their minimum investment per project to £500). You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Last year I set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (then about £412) copying an experienced eToro trader called Aukie2008 (real name Mike Moest).

In January 2023 I added to this with another $500 investment in one of their thematic portfolios, Oil Worldwide. I also invested a small amount I had left over in Tesla shares.

My original investment totalling $1,022.26 is today worth $1,193.36, an overall increase of $171.10 or 16.73%. in these turbulent times I am quite happy with that.

I thought it might also be interesting to update you on how my eToro virtual portfolio is faring (I wrote about my virtual portfolio a few weeks ago in this blog post). Overall, this is down by $2558 in value, largely due to some big losses experimenting with commodity trading (I decided this wasn’t for me). It is very interesting to see which investments in my virtual portfolio have been doing well and which poorly, though.

I can’t get all of the investments in this port into a single screen capture, but here are the top performers…

And here are the worst-performing ones…

As you can see, the best performing investment in my virtual portfolio is Oil Worldwide. This continues to forge ahead since it was rebalanced in July by eToro. The second best is my copy trading portfolio with Aukie2008. I am obviously glad I have both of these in my real money portfolio as well!

By contrast, the two renewables smart portfolios I hold, Golden Energy and Renewable Energy, are currently showing substantial (thankfully virtual) losses.

Renewable Energy has actually lost over 35% in value since I notionally invested in it. This certainly does seem to confirm that investing in renewables is risky and by no means a guaranteed route to profit, despite all the green energy hype at the moment. I am tempted to suggest that Just Buy Oil might be a better strategy 😉

This article in the Financial Times explains some of the reasons renewable energy stocks are struggling right now.

You can read my full review of eToro here. You may also like to check out my more in-depth look at eToro copy trading. I also discussed thematic investing with eToro using Smart Portfolios in this recent post. The latter also reveals why I took the somewhat contrarian step of choosing the oil industry for my first thematic investment.

eToro also recently introduced the eToro Money app. This allows you to deposit money to your eToro account without paying any currency conversion fees, saving you up to £5 for every £1,000 you deposit. You can also use the app to withdraw funds from your eToro account instantly to your bank account. I tried this myself and was impressed with how quickly and seamlessly it worked. You can read my blog post about eToro Money here.

I had two more articles published in September on the excellent Mouthy Money website. The first was Will a Heat Pump Save You Money? The government is pushing heat pumps hard as a method for achieving its Net Zero target, but do the sums add up for hard-pressed consumers? In this article I took a ‘deep dive’ into the pros and cons of heat pumps and set out my personal views on whether or not they represent good value for money.

I also wrote Get Your Will Written Free of Charge in October. For those who may not know, October is Free Wills Month, when some solicitors in England and Scotland offer members of the public aged 55 and over the chance to have their wills written or updated free of charge. In my article I explain how the scheme works, and also explain why I believe everyone should have their will drawn up by a qualified solicitor.

As I’ve said before, Mouthy Money is a great resource for anyone interested in money-making and money-saving. I particularly like the ‘Deals of the Week’ feature compiled by Jordon Cox (‘Britain’s Coupon Kid’) which lists all the best current money-saving offers for savvy shoppers. Check out the latest edition here

I also published two new posts on Pounds and Sense in September (I was away quite a lot last month, which didn’t leave much time for blogging!).

The first was a revised and updated guest post by my friend and near-neighbour Sally Jenkins titled Make Money From Public Speaking.

Sally is a successful author and makes a steady sideline income speaking about writing and related subjects (including a little while ago to my local U3A group!). I added a few thoughts of my own at the end of the article. There is definitely money to be made in this field; so if it’s something that might appeal to you, do check it out.

My other post last month was a review of a new money-saving shopping app called JamDoughnut. This app lets you earn cashback on gift vouchers from over 150 shops and restaurants, for which you get up to 20% cashback. You can then use the gift vouchers as money at the retailer concerned and pocket the cashback. Read Save Money on Your Shopping With JamDoughnut for more info (and a special bonus offer!).

The opportunity to get a free share worth up to £100 by signing up Trading 212 is now closed (for the time being anyway). I hope you took advantage if eligible and your free share is doing well. The opportunity to Get a Free ETF Share Worth up to £200 with Wealthyhood is still open. This DIY wealth-building app is aimed especially at people new to stock market investing. The minimum investment to qualify for the free share offer was raised recently from £20 to £50 – but on the plus side, they now guarantee that your free ETF share will be worth at least £10.

Finally, a quick reminder that you can also follow Pounds and Sense on Facebook or Twitter (or X as we have to learn to call it now). Twitter/X is my number one social media platform these days and I post regularly there. I share the latest news and information on financial (and other) matters, and other things that interest, amuse or concern me. So if you aren’t following my PAS account, you are definitely missing out!

That’s all for today. As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

If you enjoyed this post, please link to it on your own blog or social media:

September 2, 2023

My Investments Update – September 2023

Nick Investing, Everything Else events, reviews 2 Comments

Here is my latest monthly update about my investments. You can read my August 2023 Investments Update here if you like

I’ll start as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below for the year to date shows, my main Nutmeg portfolio is currently valued at £21,188. Last month it stood at £21,548 so that is a fall of £360.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,325 compared with £3,383 a month ago, a fall of £58. Here is a screen capture showing performance since the start of this year.

The net value of all my Nutmeg investments has fallen this month by £418 or 1.68% month on month. That’s obviously a bit disappointing, but both pots are still comfortably up on where they were at the start of the year. Their total value has risen by £1,592 (6.95%) since 1st January 2023.

Of course, all investing is (or should be) a long-term endeavour. Over a period of years stock market investments such as those used by Nutmeg typically produce better returns than cash accounts, often by substantial margins. But there are never any guarantees, and in in the short to medium term at least, losses are always possible.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my overall experience over the last seven years, they are certainly worth considering. They offer self-invested personal pensions (SIPPs) and Junior ISAs as well.

I also have investments with the property crowdlending platform Kuflink. They continue to do well, with new projects launching every week. I currently have £2,145 invested with them in 17 different projects paying interest rates typically around 7%. I also have just over £100 in my cash account after another loan was repaid. I am currently considering whether to withdraw this money or (in due course) reinvest it.

To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question.

As mentioned last time, Kuflink recently changed their terms and conditions. As from Monday 21st August there is an initial minimum investment of £1,000 and a minimum investment per project of £500. I wondered if this would also apply to their secondary market and this does indeed seem to be the case. When I checked just now, there was only one loan on offer for under £500 (£413) and all the others were £500 or more.

Kuflink say they are doing this to streamline their operation and minimize costs. I can understand that, though it does mean the option to ‘test the water’ with a small first investment has been removed. It will also make it harder for small investors (like myself) to build a well-diversified portfolio on a limited budget. As mentioned, my current portfolio of £2,145 comprises 17 different investments ranging from £50 to £200. If I was starting out again now, that same amount of money would only stretch to four deals!

One possible way around this is to invest using Kuflink’s Auto/IFISA facility. Your money here is automatically invested across a basket of loans over a period from one to three years. The rates on offer from August 1 2023 are shown in the graphic below.

As you may gather, you can invest tax-free in a Kuflink Auto IFISA. Or if you have already used your annual iFISA allowance elsewhere, you can invest via a taxable Auto account. You can read my full Kuflink review here if you wish.

Moving on, my Assetz Exchange investments continue to generate steady returns. Regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated a respectable £134.95 in revenue from rental income. As I said in last month’s update, capital growth has slowed, though, in line with UK property values generally.

At the time of writing, 9 of ‘my’ properties are showing gains, 1 is breaking even, and the remaining 16 are showing losses. My portfolio is currently showing a net decrease in value of £28.83, meaning that overall (rental income minus capital value decrease) I am up by £106.12. That’s still a decent return on my £1,000 and does illustrate the value of P2P property investments for diversifying your portfolio. And it doesn’t hurt that with Assetz Exchange most projects are socially beneficial as well.

Obviously the fall in capital value of my AE investments is disappointing. But it’s important to remember that until/unless I choose to sell the investments in question, it is largely theoretical, based on the most recent price at which shares in the property concerned have changed hands. The rental income, on the other hand, is real money (which in my case I have chosen to reinvest in other AE projects to further diversify my portfolio).

Also, as I noted last time, the recent high inflation rate has actually been beneficial for Assetz Exchange investors. That is because properties on the platform generally have an annual review when rentals are increased in line with inflation. That means from the end of the financial year in April, rentals have increased in most cases by around 10%. Assetz Exchange recently published a blog post about this which is worth a read.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned (especially now that Kuflink have raised their minimum investment per project to £500). You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Last year I set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (then about £412) copying an experienced eToro trader called Aukie2008 (real name Mike Moest).

In January 2023 I added to this with another $500 investment in one of their thematic portfolios, Oil Worldwide. I also invested a small amount I had left over in Tesla shares.

As you can see from the screen capture below, my original investment of $1,022.26 is today worth $1,198.50, an overall increase of $176.24 or 15.05%. in these turbulent times I am very happy with that.

In the last month my copy trading portfolio with Aukie2008 has fallen in value, though I am not too concerned about this as the investment is still well up overall. My Tesla shares have again done well (thank you, Elon Musk). I am also pleased that Oil Worldwide continues to forge ahead since it was rebalanced in July by eToro. Looking at my eToro virtual portfolio, I can see that Oil Worldwide is still doing much better than the two renewables smart portfolios I hold, which are currently showing substantial (thankfully virtual) losses. Make of this what you will!

You can read my full review of eToro here. You may also like to check out my more in-depth look at eToro copy trading. I also discussed thematic investing with eToro using Smart Portfolios in this recent post. The latter also reveals why I took the somewhat contrarian step of choosing the oil industry for my first thematic investment.

eToro also recently introduced the eToro Money app. This allows you to deposit money to your eToro account without paying any currency conversion fees, saving you up to £5 for every £1,000 you deposit. You can also use the app to withdraw funds from your eToro account instantly to your bank account. I tried this myself and was impressed with how quickly and seamlessly it worked. You can read my blog post about eToro Money here.

I had three more articles published in August on the excellent Mouthy Money website. The first was Can You Make Money From Holiday Lets? This is a dream for many people, and there is no doubt you can make a valuable extra income this way (not to mention the opportunity to enjoy cheap holidays at the property yourself!). In my article I set out some key things you need to be aware of.

I also wrote How to Become an Amazon Vine Reviewer. This is a subject close to my heart. I’ve been an Amazon Vine reviewer for over ten years and in some ways it’s been the most profitable sideline I’ve ever had. You don’t get paid for Amazon Vine reviews, but you do get to keep the items concerned (my most valuable so far being a £1200 gaming laptop). In my article I spill the beans on how the scheme works and suggest how you might get an invitation to become a ‘Vine Voice’ yourself.

My third article was Play Your Supermarket Loyalty Cards Right. In this article I explained why stores use loyalty cards and their pros and cons for customers. I also described the leading loyalty cards in the UK (including Tesco Clubcard, Nectar, Morrisons, Boots, and so on), covering how they work in practice and how to get the most from them.

As I’ve said before, Mouthy Money is a great resource for anyone interested in money-making and money-saving. I particularly like the ‘Deals of the Week’ feature compiled by Jordon Cox (‘Britain’s Coupon Kid’) which lists all the best current money-saving offers for savvy shoppers. Check out the latest edition here

I also published several new posts on Pounds and Sense in August. The deadlines on some of these have now passed, so I hope you took advantage at the time! You might, however, still want to check out What is U3A and Is It For You?

U3A stands for University of the Third Age. It is a non-profit organization offering a range of leisure activities for retired and semi-retired people. I recently joined my local U3A myself, and in this post set out my experiences and impressions, for the benefit of anyone else who might be interested in joining now or in future.

In other news, the Trading 212 free share offer is back. If you haven’t done this before, you can get a free share worth up to £100. You just have to sign up on the website and deposit a minimum of £1 into your account. This offer is running till 27 September 2023. See Get a Free Share Worth up to £100 with Trading 212 for more info.

The opportunity to Get a Free ETF Share Worth up to £200 with Wealthyhood is also still open. Wealthyhood is a DIY wealth-building app aimed especially at people new to stock market investing. As from June 2023 they changed their fee structure to make it (even) more attractive to small investors. They have increased the minimum investment to qualify for the free share offer from £20 to £50 – but on the plus side, they guarantee that your free ETF share will be worth at least £10.

Finally, a quick reminder that you can also follow Pounds and Sense on Facebook or Twitter (or X as we have to learn to call it now). Twitter/X is my number one social media platform these days and I post regularly there. I share the latest news and information on financial (and other) matters, and other things that interest, amuse or concern me. So if you aren’t following my PAS account, you are definitely missing out!

As a matter of interest, I recently paid £100 for Twitter/X premium membership. Although I do like the snazzy blue tick, my main reason was to get continued access to the scheduling tool Tweetdeck (now called X-pro) which became subscriber-only last month. I was accused the other day of ‘selling out’ to Elon Musk for doing this. But personally I don’t begrudge the money, as the extra tools and features make working with Twitter much easier and more enjoyable. And if my money helps keep the platform afloat, that’s an additional benefit in my book.

That’s all for today. As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

If you enjoyed this post, please link to it on your own blog or social media:

August 17, 2023

Mintos Crowdlending Platform – Bonus Offer!

Nick Investing events, reviews, crowdfunding 0 Comments

Updated 20 November 2023

Today I’m spotlighting Mintos, a European crowdlending platform based in Latvia but open to people in the UK. You may have seen my earlier post on Investing Basics for Beginners, which was sponsored by MIntos.

With Mintos, your money is invested in loans to businesses and private individuals arranged by Mintos’s partner lending companies around the world. Mintos act as intermediaries between lenders and borrowers. They aim to ensure that both groups act responsibly and loans are repaid in a timely way.

Currently Mintos offer the opportunity to invest in agricultural loans, business loans, car loans, car rentals, invoice financing, mortgage loans, personal loans, pawnbroking loans and short-term loans.

You can begin investing with just €50 (around £43). Since 2015, investors with Mintos have earned a 9.54% net return per year on average. Of course, past performance is no guarantee of how any investment platform will do in future. Currently, however, interest rates on the platform are averaging around 12.50%.

What Guarantees Are There?

To ensure security, Mintos provides a return-on-investment guarantee. If a loan instalment remains unpaid 60 days after becoming due, Mintos say they will repay the investment at face value with any accrued interest.

Mintos further insist that all lenders on their platform maintain 5-10% of any loan on the platform themselves. This means that in the event of a default, the lender will lose some of their own money also. So they have ‘skin in the game’, as the expression goes 🙂

The other main risk, of course, is the collapse of the platform itself. While this could happen, it’s worth noting that Mintos is licensed and supervised by Latvijas Banka, the central bank of Latvia, and a member of the Latvian national Investor Compensation Scheme. If Mintos fails to provide investment services, retail investors are entitled to compensation of 90% of the irrevocable loss resulting from the non-provision, up to a limit of €20 000.

In addition, as is generally the case with crowdlending/P2P platforms, your assets are held quite separately from Mintos’s assets.

Investing in Euro

As Mintos is a European operation, you will need to invest in euro and your returns will be paid in this currency. That obviously adds a layer of complication for UK residents, but there are various ways round this. If you have a UK bank account you will normally be able to make (and receive) payments in euro, but may be charged a transaction fee.

You could use your own bank to fund your account initially, but if you become a regular investor with Mintos you might want to use a service/account that charges lower fees. You could use a money transfer service such as Paysera or Wise (formally TransferWise). These will enable you to transfer funds between Mintos and your own bank account with (potentially) lower charges and a more favourable exchange rate.

Another option would be to open a euro account with a provider such as Starling. This will allow you to receive and make payments in both sterling and euro, again at a lower overall cost.

Opening an Account

To open a Mintos account, your first step will be to click on Create Account at the top of the Mintos homepage. There are then certain preliminary steps you will need to take…

Verify your identity and answer some questions about yourself
This is necessary to comply with anti-money laundering laws and KYC (Know Your Customer) requirements.
Take the Suitability & Appropriateness assessment
As a licensed investment firm, Mintos are required to ensure that the products they offer are suitable and appropriate for investors. Based on your answers, they will make certain methods of investing available to you and set a responsible investment limit for your account. You can retake the assessment at any time if your situation changes.
Transfer funds to your Mintos account (see above)

Once this has been done, you can start investing. You have various options here. The simplest is to use one of Mintos’s automated strategies. These work as follows:

Choose a strategy that matches your preference: Diversified, Conservative, or High-yield.
Your strategy will buy small fractions of many different loans or Sets of Notes from different lending companies around the world.
You will be shown the weighted average interest rate of available investments before you invest.
Mintos can (if you wish) reinvest your returns so your money can work continuously and earn even more interest.
You can get your investment back any time by cashing out funds from your Mintos strategy.
You can start or stop your strategy at any time.
Your exposure is capped at 15% per lending company.

Alternatively, you can use a custom strategy, where you choose from a huge range of available investments yourself. You can filter by more than 20 different investing criteria and diversify your portfolio according to your preferences. You can do this entirely manually or create a custom automated investing strategy based on the rules you set.

When you want to withdraw money, your Mintos Core portfolio will automatically sell investments in your portfolio to other investors. Selling may take from a couple of minutes to a few days, depending on demand from other investors at the time. Note that loans which are in default cannot be cashed out this way, and you will have to wait until the loan in question is back in good stead or the 60-day guarantee (see above) kicks in. In some circumstances you may be able to sell loans which are unavailable for cashing out on Mintos’s secondary market, for which a 0.85% fee will be charged. This article on the MIntos website has more information about the cashing out rules and restrictions.

Special Bonus!

Until 30 November 2023, if you click through any link to Mintos in this article and invest €1000 or more, you will get a €50 instant bonus and a 1% bonus of your average investment in the first 90 days.

If you invest €5000, for example, in addition to the returns advertised (currently averaging 12.5%), you will also receive a €50 instant bonus and a further 1% bonus of €50 after 90 days. Effectively that’s an extra 2% bonus. Remember, this special offer closes on 30 November 2023.

If you have any comments or questions, as always, please do leave them below.

Disclosure: I am not a registered financial adviser and nothing in this article should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing, and if in any doubt seek advice from a registered financial adviser before proceeding. All investing carries a risk of loss.

This post includes affiliate links. If you click through and make an investment (or perform some other designated action) I may receive a commission for introducing you. This will not affect the product or service you receive or any charges you may pay. Note also that the special bonus referred to in this article is only available if you click through one of my links. It will not apply if you go to the Mintos website directly.

If you enjoyed this post, please link to it on your own blog or social media:

August 1, 2023

My Investments Update – August 2023

Nick Investing events, property, crowdfunding 4 Comments

Here is my latest monthly update about my investments. You can read my July 2023 Investments Update here if you like

I’ll start as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below for the year to date shows, my main Nutmeg portfolio is currently valued at £21,548. Last month it stood at £21,044 so that is a rise of £504.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,383 compared with £3,293 a month ago, an increase of £90. Here is a screen capture showing performance since the start of this year.

This has clearly been another good month for both my Nutmeg pots. Their total value has risen by £594 or 2.44% month on month. Since the start of 2023 the net value of my Nutmeg investments has grown by £2,010 or 8.78%. Compared with mid-October last year that’s an impressive rise of £3,118 or 14.29%.

Of course, all investing is (or should be) a long-term endeavour. Over a period of years stock market investments such as those used by Nutmeg typically produce better returns than cash accounts, often by substantial margins. But there are never any guarantees, and in in the short to medium term at least, losses are always possible.

Also, as you may know, both my Nutmeg pots have quite high risk levels (9/10 main, 5/5 Smart Alpha). If you haven’t yet seen it, you might like to check out my blog post in which I looked at the performance over time of Nutmeg fully managed portfolios at every risk level from 1 to 10 . I was pretty amazed by the difference risk level makes, with higher-risk ports over almost any period of three or more years in the last ten generating significantly better overall returns. If you are investing for the long term (and you almost certainly should be) choosing a hyper-cautious low-risk level might not therefore be the smartest strategy. The one exception is if you plan to withdraw your money soon and don’t want to risk losing too much if there is a sudden downturn.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my overall experience over the last seven years, they are certainly worth considering. They offer self-invested personal pensions (SIPPs) and Junior ISAs as well.

I also have investments with the property crowdlending platform Kuflink. They continue to do well, with new projects launching every week. I currently have £2,185 invested with them in 18 different projects paying interest rates typically around 7%. To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question.

Last month a couple of my Kuflink loans were repaid, so I got my capital back with interest. I decided to withdraw about half of the proceeds to help pay for a couple of big purchases. The other half I reinvested in short-term loans on Kuflink’s secondary marketplace.

I heard this month that Kuflink are changing their terms and conditions. Specifically, from Monday 21st August there will be an initial minimum investment of £1,000 and a minimum investment per project of £500.

Kuflink say they are doing this to streamline their operation and minimize costs. I can understand their reasoning, though it does mean the option to ‘test the water’ with a small first investment has been removed. It will also make it harder for small investors (like myself) to build a well-diversified portfolio on a limited budget. As mentioned, my current portfolio of £2,185 comprises 18 different investments ranging from £50 to £200. Once the minimum £500 per project limit applies, the same amount of money would only stretch to four!

One possible way around this is to invest using Kuflink’s Auto/IFISA facility. Your money here is automatically invested across a basket of loans over a period from one to three years. The rates on offer from August 1 2023 are shown in the graphic below.

As you may gather, you can invest tax-free in a Kuflink Auto IFISA. Or if you have already used your annual iFISA allowance elsewhere, you can invest via a taxable Auto account.

You can read my full Kuflink review here. Note that I haven’t updated the information there about minimum investments as yet, but will do so shortly. You can of course still invest smaller amounts than £500 until the August 21st deadline.

Moving on, my Assetz Exchange investments continue to generate steady returns. Regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated a respectable £128.32 in revenue from rental income. As I said in last month’s update, capital growth has slowed, though, in line with UK property values generally.

At the time of writing, 12 of ‘my’ properties are showing gains, 1 is breaking even, and the remaining 13 are showing losses. My portfolio is currently showing a net decrease in value of £17.46, meaning that overall (rental income minus capital value decrease) I am up by £110.86. That’s still a decent return on my £1,000 and does illustrate the value of P2P property investments for diversifying your portfolio. And it doesn’t hurt that with Assetz Exchange most projects are socially beneficial as well.

Obviously the fall in capital value of my AE investments is slightly disappointing. But it’s important to bear in mind that unless and until I choose to sell the investments in question, it is largely theoretical. The rental income, on the other hand, is real money (which in my case I have chosen to reinvest in other AE projects to further diversify my portfolio).

I also spoke to the CEO of Assetz Exchange, Peter Read, recently. He made the point that capital values on the platform simply reflect the latest price at which shares in the property concerned have changed hands on their exchange. They do not represent objective or independent valuations of the properties. If you are investing long term with AE, the annual yield from rentals is really a much more important consideration.

Peter also made the point that the current high inflation rate has actually been beneficial for Assetz Exchange investors. That is because properties on the platform generally have an annual review when rentals are increased in line with inflation. That means from the end of the financial year in April, rentals have increased in most cases by around 10%. Assetz Exchange recently published a blog post about this which is worth a read.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned (especially now that Kuflink have raised their minimum investment per project to £500). You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Last year I set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (then about £412) copying an experienced eToro trader called Aukie2008 (real name Mike Moest).

In January 2023 I added to this with another $500 investment in one of their thematic portfolios, Oil Worldwide. I also invested a small amount I had left over in Tesla shares.

As you can see from the screen capture below, my original investment of $1,022.26 is today worth $1,208.40, an overall increase of $186.14 or 18.20%. in these turbulent times I am very happy with that.

In the last month my Tesla shares and my copy trading portfolio with Aukie2008 have both done well. I am also pleased that my investment in Oil Worldwide is back in profit again. This has happened since the Oil Worldwide portfolio was rebalanced by eToro – which is, of course, as I hoped

You can read my full review of eToro here. You may also like to check out my more in-depth look at eToro copy trading. I also discussed thematic investing with eToro using Smart Portfolios in this recent post. The latter also reveals why I took the somewhat contrarian step of choosing the oil industry for my first thematic investment.

eToro also recently introduced the eToro Money app. This allows you to deposit money to your eToro account without paying any currency conversion fees, saving you up to £5 for every £1,000 you deposit. You can also use the app to withdraw funds from your eToro account instantly to your bank account. I tried this myself recently and was impressed with how quickly and seamlessly it worked. You can read my blog post about eToro Money here.

I had two more articles published in July on the excellent Mouthy Money website. The first was How to Make Money Selling Photos to Stock Photography Services. If you enjoy photography – even if only on your mobile phone – this is definitely an opportunity you should check out.

My other article was How to Find Out What Your State Pension Will Be. The state pension is a very important component of most people’s income in later life (including mine). In this article I discuss changes to the state pension age and explain how to check when you will become eligible and how much you are on track to receive. I also discuss what options you may have if your projected pension is less than you hoped.

As I’ve said before, Mouthy Money is a great resource for anyone interested in money-making and money-saving. I particularly like the ‘Deals of the Week’ feature compiled by Jordon Cox (‘Britain’s Coupon Kid’) which lists all the best current money-saving offers for savvy shoppers. Check out the latest edition here 🙂

I also published several new posts on Pounds and Sense in July. One of these was Make a Sideline Income Renting Out Your Driveway. As I explain in the article, this is a money-making opportunity that – if you’re in a position to do it – can bring you a steady income for very little effort.

Also in July I published an article explaining why it was Time to Use or Exchange Your Old Non-Barcoded Postage Stamps. That deadline has now passed, but if you still have any ordinary non-barcoded stamps lying around, as the article explains, you can still exchange them using Royal Mail’s ‘Swap Out’ scheme.

Investing Basics for Beginners is a collaborative post with my friends at the European crowdlending platform Mintos. The article sets out some basic principles for anyone who may be considering investing for the first time (though it may also be of interest to more experienced investors).

Finally in July I published Five Things I Have Learned from my eToro Virtual Portfolio. Anyone with an eToro account gets a $100,000 virtual account to practise trading and investing with. I have found this interesting and enjoyable, not to mention educational. In the article I set out five lessons learned from my virtual account that have helped inform my real-life investing decisions. I am considering publishing a further update about my virtual portfolio and how it’s doing, if there is sufficient interest in this.

Lastly, I would mention that the opportunity to Get a Free ETF Share Worth up to £200 with Wealthyhood is still open. To remind you, Wealthyhood is a DIY wealth-building app aimed especially at people new to stock market investing. As from June 2023 they changed their fee structure to make it (even) more attractive to small investors. They have now increased the minimum investment to qualify for the free share offer from £20 to £50 – but on the plus side, they guarantee that your free ETF share will be worth at least £10.

That’s all for today. I hope you’re enjoying the summer, even though July has been a damp squib in Britain compared with June. If you’re looking for some ideas for short breaks, don’t forget to check out my blog post listing some of my favourite UK holiday destinations. Here’s hoping the warm, sunny weather makes a reappearance soon…

As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

Cover image courtesy of BingAI.

If you enjoyed this post, please link to it on your own blog or social media:

July 15, 2023

Investing Basics for Beginners

Nick Investing reviews, crowdfunding 0 Comments

Today I have a collaborative post for you in association with my friends at European crowdlending platform Mintos.

The article sets out some basic principles for anyone who may be considering investing for the first time.

Introduction

if you’re looking to build long-term wealth and create the financial means to achieve life-long goals, investing can be the key to doing this. To get you started, we’ve put together an overview of what investing is, what people invest in, how people invest, and what you might need to start your investment journey.

Key takeaways

Investing can be an effective way to build long-term wealth and unlock financial freedom.
When you invest, you can expect to earn a profit on the money you have invested, otherwise known as an investment return.
Investment returns compound (grow bigger and bigger) each time you reinvest them, helping you achieve financial goals faster.
Investments are referred to as assets; they are grouped into asset classes, e.g. cash, stocks, bonds, real estate, commodities, and alternatives.
Anyone can start investing, regardless of experience or financial situation. Even just a little money can go a long way.

What Is Investing?

Whether consciously or not, we invest our time and energy throughout our lives, whether it’s on getting a university degree or learning to cook a new recipe. Typically we do these things because we expect them to bring us value in future, e.g. landing our dream job after finishing university.

With investing money, the concept is similar – you put your money into something with the expectation that you’ll make a profit from this in the future.

The profit you earn from investments is commonly referred to as a return. This is often expressed as a percentage. For example, if you invest €1000 in something and at the end of the investment period, you get back €1100, then your profit would be €100, giving you a 10% return on your investment.

Why Do People Invest?

For many years people have used investing as a means to build their wealth. The reason long-term investing is so effective is because of compound growth. Investment returns compound (grow bigger and bigger) each time they are reinvested, helping you achieve your financial goals faster.

For example, if you invest €100 a month over the next 20 years at an 8% interest rate, each year your funds will grow at a faster pace (see chart below). The idea is that by the end of the investment period, you will have significantly more money than if you’d added the same amount to a savings account.

For many, investing provides the means to pay for education, home ownership, cars, travel, retirement, and so on. So people often look to investing because it can provide them with opportunities.

What Do People Usually Invest In?

When you own something of value that can be converted to money, it’s described as an asset. Assets can be liquid, meaning they can be quickly converted to money, or illiquid, where it’s more time-consuming and complex to turn them into money.

In the investment market, assets are categorized into asset classes. These are groups of assets with similar characteristics. Some examples of popular asset classes are:

Where to Start?

As you can see, there are many different ways of investing. How people choose often comes down to prior experience and financial objectives. Although the investment landscape may seem vast, there are options to suit everybody.

A great way to get started is to set investment goals. Once you have some clarity around your goals and budget, you can begin to research which assets or asset classes will suit your financial objectives and risk appetite.

Investment platforms that offer simple, automated investing strategies can be an easy place to begin. These strategies are built using expert analysis and data, reducing the need for prior expertise or in-depth research. An example here is Wealthyhood.

Investments in Exchange Traded Funds or ETFs (large investment portfolios investors can buy shares in) are also relatively straightforward. They’re managed by investment firms and require no work from an investor’s perspective. One example of a robo-adviser investment platform that uses ETFs is Nutmeg.

Or, if you’d like more control, you can research and make individual investment decisions yourself using brokers or self-investment platforms such as eToro.

Some investors only have one asset, such as a real estate (property) investment. Others own many different assets, forming what’s known as an investment portfolio.

When creating a portfolio, it’s important not to put all your eggs in one basket. It can be beneficial to invest smaller amounts across multiple assets, so your lower-risk investments balance the higher-risk ones – an investment strategy known as diversification. Doing this can increase the chances you’ll achieve the returns you expected while reducing the risk of significant losses.

Many investment platforms only require small amounts to get started. For example, on Mintos you can begin investing with just €50 (around £43). When you invest responsibly, even a little money can go a long way and bring you closer to achieving your financial goals.

As mentioned earlier, Mintos is a European crowdlending platform. Your money is invested in loans to businesses and private individuals arranged by MIntos’s partner lending companies from around the world.

As Mintos is a European operation, you will need to invest in euro and your returns will be paid in this currency. That obviously adds a layer of complication for UK residents, but there are various ways around this. If you have a UK bank account you will normally be able to make (and receive) payments in euro, but may be charged a transaction fee.

You could use your own bank to fund your account initially, but if you become a regular investor with Mintos you might want to use a service/account that charges lower fees. You could use a money transfer service such as Paysera or Wise (formally TransferWise). These will enable you to transfer funds between Mintos and your own bank account with (potentially) lower charges and a more favourable exchange rate.

Another option would be to open a euro account with a provider such as Starling. This will allow you to receive and make payments in both sterling and euro, again at a lower overall cost.

If you’d like to check out the options for inventors on Mintos – and learn more about how they operate and how risks are managed – please see this page of their website. Since 2015, investors with Mintos have earned a 9.54% net return per year on average. Of course, past performance is no guarantee of how any investment platform will do in future.

Special Bonus!

Until 30 August 2023, if you click through any link to Mintos in this article and invest €1000 or more, you will get a €50 instant bonus and a 1% bonus of your average investment in the first 90 days.

If you invest €5000, for example, in addition to the returns advertised, you will also receive a €50 instant bonus and a further 1% bonus of €50 after 90 days.

Thank you again to my friends at Mintos for their assistance with this article. If you have any comments or questions, as always, please do leave them below.

Disclosure: This is a collaborative post in association with Mintos. I am not a registered financial adviser and nothing in this article should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing, and if in any doubt seek advice from a registered financial adviser before proceeding. All investing carries a risk of loss.

This post includes affiliate links. If you click through and make an investment (or perform some other designated action) I may receive a commission for introducing you. This will not affect the product or service you receive or any charges you may pay. Note also that the special bonus referred to in this article is only available if you click through one of my links and will not apply if you go to the Mintos website directly.

If you enjoyed this post, please link to it on your own blog or social media:

Five things I have learned from my virtual eToro portfolio

July 7, 2023

Five Things I Have Learned From My eToro Virtual Portfolio

Nick Investing reviews 0 Comments

In my post today I’m focusing on the trading and investment platform eToro. I originally reviewed eToro in this post.

eToro is a Israeli fintech company based in Cyprus. The company also has registered offices in the UK, US and Australia. It is a hugely popular platform with 25 million customers from over 140 countries across the world.

eToro is regulated and authorised in the UK by the Financial Conduct Authority (FCA) and is covered by the Financial Services Compensation Scheme (FSCS). That means if eToro were to go bust any deposits with them up to £85,000 would be protected. Of course, the FSCS doesn’t protect you if you lose money simply due to your investments performing poorly.

eToro offers a wide range of investment products, from individual shares to cryptocurrencies, commodities to ETFs, currency pairs to copy trading, and thematic investing via smart portfolios. Today, though, I’m focusing on a feature that doesn’t require any outlay at all. This is the facility to operate a $100,000 virtual portfolio on the platform, to familiarise yourself with how it works and test out trading and investing strategies.

I have been an eToro investor for around a year now. I started with a virtual portfolio, but as regular readers will know I have also invested some real money. I do still use my virtual portfolio, however, and have learned a number of valuable lessons from it. So I thought today I’d set out some of these.

I’ll start by showing you some data on how my virtual portfolio has been performing. As I have quite a lot of different investments in this, I have taken two separate screen captures showing first the best performing and then the worst performing. As you will see, I am down a bit overall, but I’m not upset about that as obviously I have been experimenting to try to assess what works and what doesn’t.

Best Performing Investments

Worst Performing Investments

Some Lessons Learned

I hope you found the screen captures of my virtual portfolio interesting. They include most of my current investments apart from one or two in the middle. I can’t discuss every investment in detail here, but as promised here are some of the lessons that I have drawn from my experiences to date.

Copy trading can be profitable

As you can see, the best performing investment in my virtual portfolio is copy trading Aukie2008 (Mike Moest). This has generated a profit of almost $1000 for me. Regular readers will know that I also invested some real money following this trader and have done well from this too.

I am obviously a fan of the copy trading feature on eToro, though naturally some traders do better than others. When I was starting out I also considered investing some real money following a trader called Nezatron (of course, I wasn’t the least bit influenced by the fact that she is an attractive blonde…). But as you can see above, the results she has achieved over the last year aren’t nearly as impressive.

Please read my blog post about copy trading on eToro for more information about this feature.

Trading in Commodities/CFDs really IS high risk

Another option for investors on eToro is commodities. These range from precious metals through to food products, including the famous (or infamous) pork bellies.

It’s important to understand that when trading in these markets, you are essentially betting on whether the price will go up or down in future. The mechanism for doing this is something called Contracts for Difference, or CFDs for.short.

CFDs are leveraged investment products. That means you can make a lot of money if they go the way you predict but also lose a lot if they go the opposite way.

In my virtual portfolio I have tried commodity trading three times. The first time was with Nickel and I made a big profit. The next was Gold, and I lost all the money I had made with Nickel and a bit besides. Finally, as you can see, I opened a ‘buy’ trade with the rare metal Palladium. This trade also went the wrong way, so I am currently sitting on a loss of almost $4000. Obviously I am glad that isn’t real money!

If you’re wondering why my Nickel and Gold trades aren’t showing in my screen captures, it’s because the stop-profit and stop-loss limits respectively were reached and the trades closed out. You are obliged to set stop profits and stop losses on the eToro platform, though you can of course adjust them subsequently if you wish..

To be fair to eToro, they have warnings across the site that trading with CFDs is extremely risky. But trying it myself (in virtual form) really has brought home to me the risk you are running, especially if you don’t fully understand what you’re doing. Indeed, if it wasn’t for my commodity-trading experiments, my virtual portfolio would be well in profit by now.

If, despite this, you still want to find out more about commodity trading using CFDs, the eToro website has a useful introductory guide here. As for me, I am not planning to try it again any time soon!

You can’t always trust ‘the wisdom of the crowd’

You might wonder how I chose which commodities to invest in. Well, eToro shows you what proportion of investors at any time are buying a particular commodity (i.e. forecasting its price will rise) and what proportion are selling (i.e. forecasting it will fall). Here is a screen capture illustrating this.

No doubt naïvely, I assumed that if a very high proportion of investors are ‘buying’ a particular commodity, doing likewise should be profitable. As mentioned, though, while that worked on the first occasion I tried it, it didn’t on the second or third. So while this information might be useful in some circumstances, my experiences indicate that it is definitely not to be relied upon.

Investing in renewables isn’t a one-way bet

You might also assume (as I did) that in the current climate crisis and manic quest to achieve Net Zero, investing in renewables ought to be a profitable strategy.

To test this, I invested in two eToro smart portfolios in this sector. One is called Renewable Energy and the other Golden Energy. As you can see from my earlier screen capture, both have performed poorly and are at the bottom of my list (just above Palladium). I am currently down about $1000 on each.

In a somewhat ironic twist, my investment in a smart portfolio called Oil Worldwide is actually showing a small profit. Regular readers will be aware that I also have some real money in Oil Worldwide.

I don’t really know why companies in the renewable energy sector should be under-performing (on eToro at any rate). But again it does make the point that what may appear to be ‘nailed-on’ profitable investments can still end up losing money. There is never any guarantee!

You can read my blog post here about smart portfolios, which allow you to invest thematically on eToro.

Health and AI are two sectors worth watching

As you can see, one of the best performing investments in my virtual portfolio was Diabetes-Med. This is a smart portfolio covering companies in the field of diabetes care, treatment and prevention. As someone who has previously been diagnosed prediabetic, I had a particular interest in this. And with diabetes on the rise across the world, it did seem to me it was a sector with good profit potential.

Another of my more profitable investments was Cancer-Med. Again I had personal reasons for wanting to invest in this, as my partner Jayne died from cancer and I have been treated for prostate cancer myself. Obviously a lot of research money goes into cancer, and successful treatments can prove extremely lucrative for the companies concerned.

AI, or artificial intelligence, is a major talking point at the moment. While some concerns have been expressed about its potential downsides, businesses are investing heavily in this field and the potential profits to be made appear huge. eToro doesn’t currently have an AI smart portfolio as such. You can, however, invest in four big tech companies (Microsoft, Amazon, Apple and Google) via the Four Horsemen smart portfolio. All four of these companies are currently pouring vast amounts of money into AI research.

My investment in Four Horsemen has generated a decent (virtual) profit for me so far and I don’t see that changing any time soon. I may well be investing some real money in this smart portfolio before long.

Obviously if you wish you can also invest in any of these companies individually via eToro. But the Four Horsemen smart portfolio provides a convenient method for investing in all four, with the portfolio regularly rebalanced to ensure that investors’ funds are divided proportionately among them.

Final Thoughts

So those are five lessons I have learned from my eToro virtual portfolio. I don’t claim any of them are particularly earth-shattering or that they represent deep universal truths. But I have found all of them valuable in different ways and they will certainly inform my investing in future.

If you are interested in investing and/or trading, I do therefore recommend setting up an eToro virtual portfolio and trying different strategies with it. I shall continue to do so myself, alongside my real investments in eToro and elsewhere.

To remind you, you can read my article about setting up an eToro account – which automatically includes a $100,000 virtual portfolio – here. You can also read how my actual (real money) investments with eToro are performing in my monthly investment updates, of which this is the latest.

As always, if you have any comments or questions about this article – or eToro more generally – please do post them below.

Disclaimer: I am not a professional financial adviser and nothing in this post should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing, and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Please note also that posts on Pounds and Sense may include affiliate links. If you click through these and make a purchase or investment, I may receive a commission for introducing you. This will not affect in any way the price you pay or the product/service you receive. In some instances bonuses and other promotional incentives may only be available if you click through my link.

If you enjoyed this post, please link to it on your own blog or social media:

July 3, 2023

My Investments Update – July 2023

Nick Making Money, Saving Money, Investing events, travel 0 Comments

Here is my latest monthly update about my investments. You can read my June 2023 Investments Update here if you like

I’ll start as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below for the year to date shows, my main Nutmeg portfolio is currently valued at £21,044. Last month it stood at £20,419 so that is a rise of £625.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,293 compared with £3,175 a month ago, an increase of £118. Here is a screen capture showing performance since the start of this year.

This has clearly been a better month for both my Nutmeg pots. Their total value has risen by £743 or 3.15% month on month. Since the start of 2023 the net value of my Nutmeg investments has grown by £1,417 or 6.18%.

Of course, all investing is (or should be) a long-term endeavour. Over a period of years stock market investments such as those used by Nutmeg typically produce better returns than cash accounts, often by substantial margins. But there are never any guarantees, and in in the short to medium term at least, losses are always possible.

Also, as you may know, both my Nutmeg pots have quite high risk levels (9/10 main, 5/5 Smart Alpha). If you haven’t yet seen it, you might like to check out my blog post in which I looked at the performance over time of Nutmeg fully managed portfolios at every risk level from 1 to 10 . I was pretty amazed by the difference risk level makes, with higher-risk ports over almost any period of three or more years in the last ten generating significantly better overall returns. If you are investing for the long term (and you almost certainly should be) choosing a hyper-cautious low-risk level might not therefore be the smartest strategy. The one exception is if you plan to withdraw your money soon and don’t want to risk losing too much if there is a sudden downturn.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my overall experience over the last seven years, they are certainly worth considering. They offer self-invested personal pensions (SIPPs) and Junior ISAs as well.

Moving on, my Assetz Exchange investments continue to generate steady returns. Regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated a respectable £124.53 in revenue from rental income. As I said in last month’s update, capital growth has slowed, though, in line with UK property values generally.

At the time of writing, 12 of ‘my’ properties are showing gains, 2 are breaking even, and the remaining 12 are showing losses. My portfolio is currently showing a net decrease in value of £15.53, meaning that overall (rental income minus capital value decrease) I am up by £109. That’s still a decent return on my £1,000 and does illustrate the value of P2P property investments for diversifying your portfolio. And it doesn’t hurt that with Assetz Exchange most projects are socially beneficial as well.

Obviously the fall in capital value of my AE investments is slightly disappointing. But it’s important to bear in mind that unless and until I choose to sell the investments in question, it is largely theoretical. The rental income, on the other hand, is real money (which in my case I have chosen to reinvest in other AE projects to further diversify my portfolio).

I also spoke to the CEO of Assetz Exchange, Peter Read, recently. He made the point that capital values on the platform simply reflect the latest price at which shares in the property concerned have changed hands on their exchange. They do not represent objective or independent valuations of the properties. If you are investing long term with AE, the annual yield from rentals is really a much more important consideration.

Peter also made the point that the current high inflation rate has actually been beneficial for Assetz Exchange investors. That is because properties on the platform generally have an annual review when rentals are increased in line with inflation. That means from the end of the financial year in April, rentals have increased in most cases by around 10%. Assetz Exchange recently published a blog post about this which is worth a read.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Another property platform I have investments with is Kuflink. They continue to do well, with new projects launching every week. I currently have around £2,500 invested with them in 17 different projects. To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question.

My loans with Kuflink pay annual interest rates of 6 to 7.5 percent. These days I invest no more than £200 per loan (and often less). That is not because of any issues with Kuflink but more to do with losses of larger amounts on other P2P property platforms in the past. My days of putting four-figure sums into any single property investment are behind me now! Nowadays I mainly opt to reinvest the monthly repayments I receive from Kuflink, which has the effect of boosting the percentage rate of return on the projects in question

Obviously a possible drawback with Kuflink and similar platforms is that your money is tied up in bricks and mortar, so not as easily accessible as cash savings or even (to some extent) shares. They do, however, have a secondary market on which you can offer any loan part for sale (as long as the loan in question is performing and not in arrears). Clearly that does depend on someone else wanting to buy it, but my experience has been that any loan parts offered are typically snapped up very quickly. So if an urgent need arises, withdrawing your money (or part of it) is unlikely to be an issue.

You can read my full Kuflink review here. They offer a variety of investment options, including a tax-free IFISA paying up to 7% interest per year with built-in automatic diversification. Alternatively you can build your own IFISA, with most loans on the platform being IFISA-eligible.

Until 31 July 2023 Kuflink are offering enhanced promotional rates of up to 9.73% (gross annual interest equivalent rate) for their Auto-Invest products (IFISA-eligible). There is limited availability for this offer and it may be withdrawn any time before 31 July 2023 if the limit is reached. For more information, click here [affiliate link].

Last year I set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (then about £412) copying an experienced eToro trader called Aukie2008 (real name Mike Moest).

In January 2023 I added to this with another $500 investment in one of their thematic portfolios, Oil Worldwide. I also invested a small amount I had left over in Tesla shares.

As you can see from the screen capture below, my original investment of $1,022.26 is today worth $1,153.25, an overall increase of $130.99 or 12.81%. in these turbulent times I am very happy with that.

Since last month the price of my Tesla shares has risen substantially and my copy trading portfolio with Aukie2008 has also done well (though less spectacularly). My most recent investment in Oil Worldwide has risen a bit this month but it’s still slightly down on when I invested. The Oil Worldwide portfolio has just been rebalanced by eToro, so I am hoping for better things in the months ahead

You can read my full review of eToro here. You may also like to check out my more in-depth look at eToro copy trading. I also discussed thematic investing with eToro using Smart Portfolios in this recent post. The latter also reveals why I took the somewhat contrarian step of choosing the oil industry for my first thematic investment.

eToro also recently introduced the eToro Money app. This allows you to deposit money to your eToro account without paying any currency conversion fees, saving you up to £5 for every £1,000 you deposit. You can also use the app to withdraw funds from your eToro account instantly to your bank account. I tried this myself recently and was impressed with how quickly and seamlessly it worked. You can read my blog post about eToro Money here.

I had two more articles published in June on the excellent Mouthy Money website. The first was 10 Great Ways to Save Money on Amazon. Amazon is Britain’s – and the world’s – favourite online store. Prices on Amazon are generally competitive, but over the years I’ve discovered a variety of ways to ensure you get the best value for money from them. So in this article I set out my top ten tips for saving money on Amazon

My other article was Do You Need a Personal Financial Adviser? In this article I discuss the different types of financial adviser and what they do. I also revealed why – despite being a money blogger and considering myself reasonably financially savvy – I have a personal financial adviser myself.

As I’ve said before, Mouthy Money is a great resource for anyone interested in money-making and money-saving I always look forward to reading the articles by my fellow contributors. Shoestring Jane is a particular favourite and I enjoyed reading her recent article concerning how you can Save Money by Reducing Food Waste.

I also published several new posts on Pounds and Sense in June. One of these was My Short Break in Bath. Bath is, of course, a historic city on the River Avon, about 12 miles from Bristol. I went there for three days in June, the first time I had been for over 30 years. In my post I discuss the self-catering apartment where I stayed and reveal some of the things I did and saw. I also share a few top tips for visitors to Bath. The cover image shows the famous Pulteney Bridge, one of Bath’s best-known landmarks.

Also in June I published a guest post titled How to Manage Your Time and Money in Retirement. This came from my friends at Equity Release Supermarket and I thought it was very informative. I also added some thoughts of my own, as you will see.

I also published a post based on a survey of Britons’ investing habits. This addressed questions such as what are the main barriers stopping people investing and where do people get their investment advice from. I thought the results were quite eye-opening. Take a look if you haven’t already.

Finally, I wanted to highlight that the free share offers described in last month’s update are both still open if you haven’t done them yet. The opportunity to Get a Free Share Worth up to £100 with Trading 212 was reopened after closing briefly. It is now on offer till 27 July 2023.

The opportunity to Get a Free ETF Share Worth up to £200 with Wealthyhood is also still open but the terms have changed slightly. To remind you, Wealthyhood is a DIY wealth-building app aimed especially at people who are new to stock market investing. As from 1 June 2023 they changed their fee structure to make it (even) more attractive to small investors. They have now increased the minimum investment to qualify for the free share offer from £20 to £50 – but on the plus side, they guarantee that your free ETF share will be worth at least £10.

That’s all for today. I hope you’re enjoying the summer months and taking the opportunity to get out and about in our beautiful country (or further afield).

As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

If you enjoyed this post, please link to it on your own blog or social media:

June 7, 2023

New Survey Sheds Light on Britons’ Investing Habits

Nick Saving Money, Investing reviews, infographic, families 0 Comments

Today I am sharing some interesting data from my friends at HSBC regarding British people’s investing habits.

This information comes from a survey conducted last year by Sticky and Censuswide on behalf of HSBC. The survey was conducted online, with a total sample size of 2018 adults. It reveals how and why people in the UK are investing, and (very importantly) why many are not.

The research revealed that nearly two-thirds of people had some form of savings (64%), with more than one in three (36%) saying they had investments. Nearly half (47%) believed investing was a better way of achieving future financial goals in the current financial climate.

More than half of people (53%) who said they would like to invest but haven’t yet said they didn’t know how to begin. Just over 1 in 3 Brits are currently investing, so almost two-thirds are not.

Saving vs Investing

Somewhat reassuringly, two-thirds of people in the survey said they currently have savings (64%) and just under three-quarters (72%) said they have enough money put away to cover three months’ living expenses despite increases in the cost of living.

The main reasons people have for saving and investing are summed up in the infographic below…

As you can see, nearly half of people in the HSBC survey (46%) didn’t have a particular goal for their saving or investing – but those who did have a target were much more likely to be saving for something long-term (37%) like a house deposit or their retirement than short-term goals like holidays or other large purchases (20%).

In general, of course, saving for short-term goals is best done through cash savings accounts – but for long-term goals, typically five years or more ahead, investing is likely to produce better overall returns.

Investment Choices

The infographic below shows the main ways people in the UK are currently investing.

As you can see, the most popular investment is stocks and shares (44%), followed by funds (25%), bonds (20%) and property (19%).

When people were asked how they’d decided to invest, the most common reason given for choosing stocks and shares was the expectation of good returns (34%). Bonds were most often seen as a “safe” investment (38%).

Meanwhile, the reason for choosing funds was more equally balanced between being seen as offering good returns (34%) and being “safe” (30%), with the same being true of property (39% good return, 35% “safe”).

Barriers to Investing

When people were asked why they hadn’t chosen to invest, the most common answer (45%) was thinking they didn’t have enough money to do so. But nearly a quarter (23%) said they didn’t know enough about how to invest, ahead of the one in five (21%) who said they would worry about losing all their money.

For those who said they were scared of losing money, the main driver of those worries was the fact that investments can go down as well as up (40%). But that was followed by concerns about the need for access to their cash – with 37% saying they might need their money at short notice, and another 30% stating that their financial situation meant they couldn’t lock away money for a long time.

Those who chose to invest in jewellery and alternatives (wine, art, whisky, etc) were the most likely to say they had done so because they had expertise in that area (25%).

Investment Knowledge

When it comes to detailed financial knowledge, more than one in three (34%) said they didn’t feel they had enough information about investing. And those who wanted more help with their financial planning were most likely to need information about where to invest (25%), followed by support on types of investments (22%), the cost of investing (20%), and which investments are more or less risky (20%).

People who said they already received some information on investing were most likely to get that from their family (17%), their bank (16%), friends (15%) and social media (15%) – all ahead of financial newspapers (13%) and financial blogs (11%).

Nearly a quarter (24%) said they’d like to receive more information about investing from their bank as the primary source of information, ahead of getting help from investors (16%), social media (13%), family (11%) and financial blogs (11%) or financial newspapers (11%).

My Thoughts

Many thanks to my friends from HSBC for allowing me to share and discuss their data and graphics.

I’m not surprised that many people are wary of investing, as the subject isn’t generally taught in schools and the huge number and variety of potential investments can be bewildering.

What I find a little more surprising (and concerning) is that many more people have investments in the form of stocks and shares (46%) rather than funds (25%). I suspect this may partly be to do with people having a few shares they acquired from the big privatizations of the past such as BT and British Gas. There may also be a number who have shares through employee share schemes. Nonetheless – as I said in this recent guest post for the popular Money Talk blog – as an investment individual shares are a lot more volatile and risky. If you are new to investing, I highly recommend starting off with a collective investment such as a tracker fund or robo-adviser platform (see below). This will give you much broader diversification, which helps mitigate the risks involved.

As I’ve said before, if you suddenly find yourself in possession of a large lump sum (perhaps through an inheritance) there is a strong case for seeking advice from a trained and experienced independent financial adviser. You might like to check out my blog post on why, despite being a money blogger and considering myself reasonably financially savvy, I still have an IFA myself.

If you just want to get started in investing, there are various low-cost and relatively low-risk options you could consider. Regular readers will know that I am a fan of the robo-adviser platform Nutmeg, with whom I have been investing since 2016. Even with the recent turmoil in the markets caused by the pandemic etc., I have made an overall return of 37 percent from my investments with them. You can read my in-depth review of Nutmeg here if you wish.

Another possibility might be the wealth-building platform Wealthyhood, which is aimed especially at novice investors. You can get started on this with as little as £20 – and right now they are offering a free ETF share worth up to £200 to new investors, which should get you off to a good start! You can see my blog post about Wealthyhood and their special offer here.

Of course, all investing carries a risk of loss, in the short- to medium-term especially. You should therefore always do your own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed.

As always, if you have any comments or questions about this post, please do leave them below.

Disclaimer: I am not a professional financial adviser and nothing in this post should be construed as personal financial advice.

If you enjoyed this post, please link to it on your own blog or social media:

June 1, 2023

My Investments Update: June 2023

Nick Investing events, reviews, property, crowdfunding, pensions 0 Comments

Here is my latest monthly update about my investments. You can read my May 2023 Investments Update here if you like

I’ll start as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below for the year to date shows, my main Nutmeg portfolio is currently valued at £20,419. Last month it stood at £20,740 so that is a fall of £321.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,175 compared with £3,201 a month ago, a small decrease of £26. Here is a screen capture showing performance since the start of this year.

As you can see, this has been another up-and-down month for both my Nutmeg pots. Pro rata, though, my Smart Alpha portfolio has again done a bit better than my main portfolio. I am therefore tempted to switch more of my money into it, although there isn’t a massive difference in performance between them.

The net value of all my Nutmeg investments has fallen this month by £347 or 1.45% month on month. That is obviously disappointing, but both pots are still comfortably up on where they were at the start of the year. And their total value has risen by £1,781 (8.16%) since mid-October last year.

Of course, all investing is (or should be) a long-term endeavour. Over a period of years stock market investments such as those used by Nutmeg typically produce better returns than cash accounts, often by substantial margins. But there are never any guarantees, and in in the short to medium term at least, losses are always possible.

Also, as you may know, both my Nutmeg pots have quite high risk levels (9/10 main, 5/5 Smart Alpha). If you haven’t yet seen it, you might like to check out my blog post in which I looked at the performance over time of Nutmeg fully managed portfolios at every risk level from 1 to 10 . I was pretty amazed by the difference risk level makes, with higher-risk ports over almost any period of three or more years in the last ten generating significantly better overall returns. If you are investing for the long term (and you almost certainly should be) choosing a hyper-cautious low-risk level might not therefore be the smartest strategy. The one exception is if you plan to withdraw your money soon and don’t want to risk losing too much if there is a sudden downturn.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my overall experience over the last seven years, they are certainly worth considering. They offer self-invested personal pensions (SIPPs) and Junior ISAs as well.

Moving on, my Assetz Exchange investments continue to generate steady returns. Regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated a respectable £117.63 in revenue from rental income. As I said in last month’s update, capital growth has slowed, though, in line with UK property values generally.

At the time of writing, 7 of ‘my’ properties are showing gains, 4 are breaking even, and the remaining 14 are showing (small) losses. My portfolio is currently showing a net decrease in value of £23.62, meaning that overall (rental income minus capital value decrease) I am up by £94.01. That’s still a decent return on my £1,000 and does illustrate the value of P2P property investments for diversifying your portfolio. And it doesn’t hurt that with Assetz Exchange most projects are socially beneficial as well.

Obviously the fall in capital value of my AE investments is a bit disappointing. But it’s important to bear in mind that unless and until I choose to sell the investments in question, it is largely theoretical. The rental income, on the other hand, is real money (which in my case I have chosen to reinvest in other AE projects to further diversify my portfolio).

I also spoke to the CEO of Assetz Exchange, Peter Read, recently. He made the point that capital values on the platform simply reflect the latest price at which shares in the property concerned have changed hands on their exchange. They do not represent objective or independent valuations of the properties. If you are investing long term with AE, the annual yield from rentals is really a much more important consideration.

Peter also made the point that the current high inflation rate has actually been beneficial for Assetz Exchange investors. That is because properties on the platform generally have an annual review when rentals are increased in line with inflation. That means from the end of the financial year in April, rentals have increased in most cases by around 10%. I don’t want to go into too much detail about this here, but it is a subject I may return to in a future blog post.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Another property platform I have investments with is Kuflink. They continue to do well, with new projects launching every week. I currently have around £2,500 invested with them in 18 different projects. To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question.

My loans with Kuflink pay annual interest rates of 6 to 7.5 percent. These days I invest no more than £200 per loan (and often less). That is not because of any issues with Kuflink but more to do with losses of larger amounts on other P2P property platforms in the past. My days of putting four-figure sums into any single property investment are behind me now! Nowadays I mainly opt to reinvest the monthly repayments I receive from Kuflink, which has the effect of boosting the percentage rate of return on the projects in question

Obviously a possible drawback with Kuflink and similar platforms is that your money is tied up in bricks and mortar, so not as easily accessible as cash savings or even (to some extent) shares. They do, however, have a secondary market on which you can offer any loan part for sale (as long as the loan in question is performing and not in arrears). Clearly that does depend on someone else wanting to buy it, but my experience has been that any loan parts offered are typically snapped up very quickly. So if an urgent need arises, withdrawing your money (or part of it) is unlikely to be an issue.

You can read my full Kuflink review here. They offer a variety of investment options, including a tax-free IFISA paying up to 7% interest per year with built-in automatic diversification. Alternatively you can build your own IFISA, with most loans on the platform being IFISA-eligible.

Until 30 June 2023 Kuflink are offering enhanced promotional rates of up to 9.73% (gross annual interest equivalent rate) for their Auto-Invest products (IFISA-eligible). There is limited availability for this offer and it may be withdrawn any time before 30 June 2023 if the limit is reached. For more information, click here [affiliate link].

Last year I set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (then about £412) copying an experienced eToro trader called Aukie2008 (real name Mike Moest).

In January 2023 I added to this with another $500 investment in one of their thematic portfolios, Oil Worldwide. I also invested a small amount I had left over in Tesla shares. My original investment of $1,022.26 is today worth $1,093.00, an overall increase of $70.74 or 6.92%. in these turbulent times I am happy enough with that.

Since last month the price of my Tesla shares has risen and my copy trading portfolio with Aukie2008 has performed steadily. Unfortunately my most recent investment in Oil Worldwide is in the red, though. I am hoping for better things in the months ahead 🙂

You can read my full review of eToro here. You may also like to check out my more in-depth look at eToro copy trading. I also discussed thematic investing with eToro using Smart Portfolios in this recent post. The latter also reveals why I took the somewhat contrarian step of choosing the oil industry for my first thematic investment.

eToro also recently introduced the eToro Money app. This allows you to deposit money to your eToro account without paying any currency conversion fees, saving you up to £5 for every £1,000 you deposit. You can also use the app to withdraw funds from your eToro account instantly to your bank account. I tried this myself recently and was impressed with how quickly and seamlessly it worked. You can read my blog post about eToro Money here.

I had two more articles published in May on the excellent Mouthy Money website. The first was How to Save Money With Cashback Sites. If you ever buy anything online, you can almost certainly save money by signing up with these sites, which include Quidco and Top Cashback. You can read about my experiences with them and my top tips in this article.

My other article was Equity Release – Is It Right for You? In these financially challenging times, more and more older people are turning to equity release to release money tied up in their homes. My article explains the main options and sets out a range of points to consider before doing this.

As I’ve said before, Mouthy Money is a great resource for anyone interested in money-making and money-saving I always look forward to reading the articles by my fellow contributors. Shoestring Jane is a particular favourite and I enjoyed reading her recent article How to Start Comping and Win Big!

I also published a number of new posts on Pounds and Sense in May. One of these was about My Short Break in Aberdovey. This is a small town on the mid-Wales coast, between Aberystwyth and Tywyn. It was my first visit to Aberdovey and I recommend it for a chilled-out break – although (as I say in the article) I wouldn’t go there for the nightlife!

Also in May I published Get a Free Share Worth up to £100 with Trading 212. This offer is open until 8th June, so there is still time to take advantage if you haven’t already.

On a similar note, I published Get a Free ETF Share Worth up to £200 with Wealthyhood. Wealthyhood is a DIY wealth-building app aimed especially at people who are new to stock market investing. As from 1 June 2023 they changed their fee structure to make it even more attractive to small investors. It’s worth checking out, even if you only want the free share. This is an ongoing offer, but to qualify you do have to make a £20 minimum investment on the platform.

I also published an article titled Nibble Launches New Legal Strategy for investors. Nibble is a European crowdlending platform open to anyone. They are offering returns of up to 14.5% in their new Legal Strategy, which involves investing in loans that are in default and facing legal action (hence the name, of course). That is obviously higher risk, but NIbble guarantee to pay all investors in this strategy a minimum of 8% up to the maximum 14.5% depending how successful their recovery efforts prove. Average quarterly returns are currently 12.5%.

The other post I published in May was also about equity release. It’s titled Why Are People Opting for Equity Release? The article features some interesting research on why people are opting for equity release in the current economic climate, and what reasons are becoming more common. Definitely worth a look if equity release is on your radar.

One other thing I should mention is that I had an article published a couple of weeks ago in the Daily Telegraph newspaper about my investing experiences. If you read my monthly investment updates on PAS you won’t find too many surprises in it, but here’s a link anyway in case you’d like to check it out. Note that the article is behind a paywall so unless you are a Telegraph subscriber you will only be able to see the start.

Finally in May I enjoyed a short break in Yorkshire visiting my sister Liz and her family. Once again I stayed at the beautiful Hewenden MIll Cottages, between Wilsden and Cullingworth (near Haworth and ‘Bronte country’). If you’re looking for an unusual, rural-based short-break destination, Hewenden could certainly fit the bill. A photo of the old mill building (in which I stayed on a previous visit but not this time) is shown below. There is also a photo of the woodland at Hewenden in the cover image. You can read my original review of Hewenden Mill Cottages here.

That’s all for today. I hope you’re enjoying the better weather and taking the opportunity to get out and about in our beautiful country (or further afield).

As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers

If you enjoyed this post, please link to it on your own blog or social media: