Anybody use Nutmeg, specifically their stocks and shares isa? Been thinking about investing for the future and looking for some incites.
Use vanguard, fees a lot cheaper
Yes I use them. If you’re looking for a more lean-back option where other people with more knowledge look after your portfolio, then I’d highly recommend them. You obviously pay for their expertise in fees but it’s very cheap.
I’ve been using them for 4 months now and I’m 9.7% (£111) up on where I started, so I’m very very happy.
Are there any benefits to a stocks and shares isa or would you suggest its better to use a different one?
The advantage to any S&S ISA over the Invest accounts is that it protects from any potential capital gains tax.
Nutmeg is fine if you aren’t interested in actually investing yourself and want to bung some cash in pick an option and check it now and then.
I’ve also tried Wealthify too, same concept.
If you want to actually be involved in picking specific stocks or ETFs (a collection of stocks) then there’s two main options that have raw spreads and low/no cost.
Freetrade and T212
I have both but I would strongly recommend T212 over Freetrade. If anyone wants a free share referral happy if any wants to PM or for advice on it.
Yeah I’d be happy with advice on it. Its something I’m thinking about starting in the new tax year but have been thinking about for a while. We are not getting any younger so looking to safe guard the future as best as possible.
I have been using vanguard for my SIPP, the wifes SIPP and Kids JISA and have been adding £25-50 a month, with Vanguard and the FTSE Global All capped fund Accumulation, all roughly 30% up.
Paying about £24 a year on just my SIPP which around £25,000 and my SIPP will be going for a year feb/mar.
If you are thinking of using an ISA it’s worth mentioning you have up to £20k per tax year allocation. So if you open one today you’ll have that allocation until Jan-April 2021, if you wait until after April you’ll be eating into 2021-2022s allocation.
I’ve been using Nutmeg for about 2 years now - I’m currently sat at about +14% average return, which I’m very happy with. There was a period in March/April/May last year when I went to -10% return, but I think that’s just a consequence of market volatility at the time.
As people have said above, there are possibly cheaper ways of investing, if you want more control over where your money goes, but I’m very much happy to pay for somebody else to do that for me
Also worth mentioning that depending on what is the intention for your investment you might wanna look into Lifetime ISAs as you can get 25% government bonus. Basically if you wanna save money for retirement or a down payment on your first house and are under 40 check it out. Lifetime ISAs can be invested in stock and shares as well an Nutmeg offers that option.
I should mention I have a Lifetime ISA with them which I opened around November 2019 and am now about 8% up on the investment, which to be fair I think is about average outcome based on the market events of the year and would be achievable on your own. There is the added benefit of roboadvisors that they make you more unlikely to change the strategy based on current events and allow you to ride out the volatility. For example pulling your assets off the market after the spring crash would make you miss the growth afterwards.
The robo-investors like Nutmeg charge much higher fees than the platforms that don’t give advice in the form of picking your stocks for you. Unfortunately, none of the robo-investors are any good themselves at picking stocks.
You can have an equally easy and simple experience on eg. Vanguard, if you just pick one fund and top it up. So the “difficulty” comes in picking that one fund. But if you’re willing to take Nutmeg’s bad advice, you can equally take other people’s advise. And the simple answer is “be maximally diversified”, or “just buy the whole market”, which means pick a global fund.
Posters above note that they are “happy” with what they’ve achieved with their robo-investments. Of course, any gain might make one happy. But they are most likely losing out compared to what they could have gained by investing in a simple passive global fund on a platform with cheaper or no fees.
To take an example from this thread, if you’d instead invested in Vanguard’s global all cap in Nov 2019, you’d be up 19.69%.
Now Nutmeg does let you choose a risk level, and if you were playing it safe, they would have mixed bonds in to your portfolio, so this might not be a fare comparison. But you get the point.
My investment with them is set to medium risk as I plan to take it out in fairly near future, so it has about 30% bonds I believe. I would say that for long term investing, getting a low fee account where you buy a global index fund is definitely better and pretty easy. I was quite happy for them to decide on the mix of bonds and shares for me for a shorter period of time to achieve a lower risk of significant loss. Also, the higher fees don’t hurt that much in the shorter term.
I think we’re largely in agreement, and I don’t mean to pick on you in particular, but I do mean to pick on Nutmeg. To take another comparison, Vanguard’s LS60 fund is an easy 1 stop shop for low risk (40% bonds), and is up 10.95% since Nov 2019.
Nutmeg say say their costs are £0.72/week for a £5k investment with most of their options. That’s £45.36 since Nov 2019. They would have made you about £400. I don’t know if your 8% up was before or after fees, but we’re talking about 10% of your gain was lost as fees.
In absolute terms, £45 isn’t going to break the bank of someone with £5k to invest, but why give £45 to someone who is giving you below average gains?
With Vanguard you’d pay something like £0.15/week for the £5k, which would be £9.58 total. On a gain of £547.50, that’s less than 2% of your gains lost to fees.
So while you’re right that the drag on your performance that high fees result in is compounded over time and hurts more the longer you invest for, I think it still matters to worry about fees for small investments and small time scales. Especially in the case of very small time scales or poorly performing investments, where the fees could actually obliterate any gains you make.
See, now after reading all this great info, I am no further forward lol. I want to invest, been thinking about it for a while. What I don’t want to do, is throw £500 at it straight away. I want to start smaller, say £50/£100 I also dont know if its best to use a bespoke package so to speak or to choose some shares myself and see how it rolls for a bit.
“Seeing how it rolls” is not the way to approach it IMHO. What happens with your initial investment over a short time period is pretty much meaningless and tells you nothing about the future beyond that.
You should get enough understanding of the stock market to gain the conviction that it always goes up over a long enough time scale, and therefore gain the desire to invest what you can for your future, trusting in time to give you gains higher than any other alternative.