Nutmeg, the J.P. Morgan owned digital wealth manager, is teaming with J.P. Morgan Asset Management (JPMAM) to offer a range of five risk-rated Income Investing portfolios this month, as the two build on their existing partnership.
The new portfolio range, exclusively available to Nutmeg clients, leverages a number of JPMAM actively managed ETFs including one of the most successful and innovative strategies in the US – The J.P. Morgan Equity Premium Income family of ETFs.
The UK listed equivalent ETFs serve as the core of the Nutmeg Income Investing strategy and is an actively managed income portfolio built for a client’s risk appetite and investment timeframe. The new portfolios aim to pay clients regular income, while leaving capital invested in the market.
Income investors frustrated with lack of options
The product launch comes as new research from Nutmeg shows frustration among retail investors with the current income investing options available. Nearly 1 in 6 UK investors (16%) say they are currently unsatisfied1 with the income they receive from their investments via dividends and bonds despite over two-thirds (69%) saying that generating an income from investing is important to them.
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Nutmeg will offer an income smoothing feature to tackle the inconvenience of irregular income payments due to varying dividend payment schedules of underlying assets. After an initial period, the smoothing mechanism will offer clients greater consistency in the income they receive.
James McManus, chief investment officer at Nutmeg, said:
“As our research highlights, some investors feel frustrated with the options currently available when looking for an income generating portfolio that suits their goals and investment timeframe. As a result, many have to build their own DIY portfolio of dividend shares and income funds or go directly to a financial intermediary to design a suitable income generating portfolio and pay a premium.”
Nutmeg’s Smart Alpha portfolio range
The launch of the Income Investing strategy builds on the success of Nutmeg’s existing partnership with JPMAM. In November 2020, Nutmeg and JPMAM first teamed up to offer the Smart Alpha portfolio range, which has attracted over 54,000 investors and over £1bn in assets. The new range seeks to build on the success, expertise and investment philosophy while adding income generation to Nutmeg’s investment styles.
Similar to Smart Alpha, the Income Investing portfolios will comprise ETFs invested in equities and bonds, the underlying funds are informed by JPMAM expertise and insight and use active ETFs that seek to outperform the benchmark through active overweights and underweights.
JPMAM will offer continuous investment strategy guidance, while the Nutmeg investment team will ensure that portfolios align with the risk appetite of investors, with the aim of achieving the goals of investors.
Edward Malcolm, head of UK ETF distribution, J.P. Morgan Asset Management said:
“We’re delighted to be building on the successful partnership that we established with Nutmeg in 2020 with the launch of this second portfolio range, which leverages the investment expertise across JPMAM’s range of core active ETF building blocks and complements Nutmeg’s retail expertise. We believe we are offering retail investors access to a portfolio range that can supplement their income now, while building their wealth for the future.”
McManus said that most people invest so their money will, one day, be working harder than they are. While that day may be further off for some, many investors want a regular, consistent income stream from their investments that can provide more flexibility in life today.
Income Investing Portfolios are available for Nutmeg stocks and shares ISAs and general investment accounts from this week. Clients will pay no Nutmeg management fees on their Income Investing pots in 2025.
