Nutmeg investment strategy update – April 2016

Shaun Port

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It’s a brand new tax year and I’d like to extend a welcome to all of the new Nutmeg investors who’ve recently joined us. We’ve seen a welcome period of relative stability in the global markets over the past month.

The first three months of the year were really volatile, but now markets seemed to have turned a corner and are looking a quite a bit better. This is in contrast to last year, in which markets rallied from January to March, only to fall sharply in April and remain lacklustre for the remainder of the year.

Some of the concerns from investors around Chinese growth and currency policy have eased, growth is looking a bit better and the oil price has rebounded.

The likelihood of an interest rate rise this year has fallen. If the Federal Reserve in the US does decide to raise rates, it’ll likely be a very small increase – perhaps around a quarter of a percent.

All of this makes for more calm stock markets, a good environment to produce strong returns.

And how have Nutmeg portfolios been performing?

In March we’ve seen small positive returns. For our lowest risk portfolios this is around 0.2%, up to around 2.4% in our highest risk portfolios, so it will help to recoup the losses we saw over January and February.

April is looking good so far.  In particular, for Nutmeg portfolios, European and Japanese stock markets have been performing well.  We’ve seen a 1% -1.5% gain in mid and high-risk portfolios from these markets.

What changes will be made to portfolios this month?

We’ve made some more small changes to our allocations. We’re investing a bit more into UK large companies, where we’ve held less than we usually would for quite a while. We’re also moving some of our exposure to US stocks into the more lower-valued companies, given that the broader market looks a bit expensive at the moment.

Overall, we’ve got a good balance of risk and potential returns – I’m confident that Nutmeg portfolios are in a strong position to mitigate risks as much as possible and take advantage of the opportunities in markets for the rest of this year.

The Lifetime ISA

We’re very excited about the government’s plan to introduce the Lifetime ISA for younger savers next year.

We’ve published a dedicated blog post all about the Lifetime ISA but I can confirm we’ll be launching the Nutmeg Lifetime ISA as soon as we have the full details of the scheme from the government.

About this update: This update was published on 15 April 2016 and covers figures for the full month of March 2016, unless otherwise stated. Data sources: Bloomberg and Macrobond.

Risk warning: 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. Past or future performance indicators are not a reliable indicator of future performance. Tax rules may change in the future. Some of the Lifetime ISA rules are quite complicated and restrictions apply. If you’re unsure if a Lifetime ISA is the right choice for you, please seek independent financial advice.


Shaun Port
Shaun is the chief investment officer at Nutmeg. He has over 25 years’ experience developing and implementing investment strategies for clients ranging from central banks to pension schemes to charities and private individuals. Shaun holds a degree in Mathematical Economics from the University of Birmingham and is a Chartered Alternative Investment Analyst. He can be found tweeting @ShaunPort.

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