Nutmeg has partnered with investment giant JP Morgan to launch a range of exchange-traded funds exclusively for the robo-adviser's customers.
The robo-adviser announced today (November 18) it had teamed up with JP Morgan Asset Management to launch a “bespoke new investment offering”, named ‘Smart Alpha’, for Nutmeg customers.
James McManus, chief investment officer at Nutmeg, said: “We’ve built Europe’s largest digital wealth manager and with a strong track record in multi-asset management.”
He said: “This provides our customers with a diversified, low-cost and transparent way to access active management.”
He added that Nutmeg was “always seeking to help their clients” reach their investment goals and that many customers wanted a choice about where and how they invested.
The range will include both active and passive ETFs, and each portfolio will hold between 10 to 14 different ETFs
Edward Malcolm, head of UK ETF distribution at JP Morgan Asset Management, said it was an “exciting partnership”.
He added: “Our view is that the ETF is an attractive investment vehicle, and we see huge growth in the use of ETFs.
“We really wanted to build an ETF solution for our clients, but we didn’t want to limit ourselves to passive solutions. We offer a range of ETFs including passive, smart beta and actively managed ETFs.”
The management fee for the Smart Alpha portfolios is 0.75 per cent up to £100,000, and 0.45 per cent above that. The average underlying fund cost is 0.19 per cent and the cost of market spread is 0.07 per cent.
Nutmeg, which is backed by Schroders - among others, has failed to make a profit for the eight years it has been in business, with losses widening to more than £21m last year as the robo-adviser continued to struggle to break even.
Accounts for the year to the end of December 2019, the latest available, showed Nutmeg made a loss of £21.2m — an increase on the £18.4m loss reported for 2018.
Nutmeg told FTAdviser it had seen a successful first half of 2020 as it benefitted from the accelerated adoption of digital services due to the coronavirus crisis.
In the six months to June, Nutmeg’s customer numbers soared to 95,000 — representing a 30 per cent year-on-year jump — while its revenue also increased by nearly a third.
Total assets under management stood at £2.3bn as at June 30.
The robo-advice sector has in recent years attracted capital from large financial services firms such as Allianz, which backs Moneyfarm, LV, which backs Wealthify and BlackRock, which backs Scalable Capital.
imogen.tew@ft.com
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