Nutmeg the discretionary investment manager now owned by JP Morgan has added a new thematic portfolio style to its range of products.
New Nutmeg Thematic Portfolios
The new Thematic Portfolios, from the investment manager, will allow Nutmeg clients to put their money directly into the trends and themes that will shape our future.
Nutmeg will offer investors access to portfolios encompassing three broad-brush themes, which are, Technological Innovation, Resource Transformation and the Evolving Consumer.
These new thematic portfolios are designed as long-term investing strategies, that will invest in companies that are likely to benefit from trends, such as the growth and adoption of artificial intelligence, the transformation to renewable energy sources, and away from fossil fuels and the changing demographics of our populations.
Thematic Portfolios Selection
Nutmeg will use its research and technological capabilities to select and manage the underlying investments, in these thematic portfolios. While at the same time diversifying their exposure and avoiding risk concentration.
Clients that open a thematic portfolio will see their investments “tilted” towards the theme of their choice, the tilt will be as large as 20% of their portfolio’s equity exposure.
The portfolio will be actively managed by Nutmeg on the client’s behalf, and subject to an annual review.
Will all Nutmeg clients be able to access the Thematic Portfolios?
No, the new Thematic Portfolios won’t be available to all Nutmeg customers. Only those who are comfortable with the firm’s risk level 5 will be able to invest in thematic funds.
Thanks to their high level of equity exposure, low level of bond exposure, and the FX risk involved in investing overseas markets, and in particular in the US Dollar.
Nutmeg’s lower risk-rated portfolios, which run from 1 to 4, typically have higher rates of bond ownership and seek to minimise the FX exposure in their portfolios.
The new Thematic Portfolios are available for ISA and Junior ISA holders, with a minimum investment of £500 and £100 respectively and Nutmeg will charge 0.75% per annum management fee.
Interestingly the new portfolios won’t incorporate any ESG considerations, though it’s very likely there will be some crossover, given the nature of the broad brush themes themselves.
Nutmeg’s new Thematic Portfolios seem like a good way to gain diversified exposure to trends, that will undoubtedly play a big part in all our futures.
Retail investors, who can accept higher rates of equity exposure, may well prefer to use Nutmeg’s investment and money management expertise, to build and run their portfolios for them.
Rather than adopting a DIY approach, using their own ETF and stock selections, and to be honest fees of 0.75% per annum don’t sound exorbitant for a discretionarily managed service.