Nutmeg and J.P. Morgan Asset Management launch Smart Alpha portfolios

James McManus


3 min read

Nutmeg’s goal has always been to bring wealth management to as many people as possible. The advent of digital technology has given our clients the chance to invest for their future at minimum cost and without prohibitive barriers to entry. We do not believe in being disruptive for the sake of it, but we do believe in using technology to improve an industry too often associated with being staid and exclusive. 

Smart Alpha

To change investing for the better, we create low-cost, innovative investment portfolios which are accessible to everyone through a state-of-the art digital user experience. In just 8 years we have built one of the UK’s strongest personal investment brands. We know performance is the bottom line, so we’re delighted to have consistently delivered market beating returns to over 100,000 customers. 

But this is just the beginning of a journey where we are always moving forward. In November 2020 we are delighted to announce that we are collaborating with J.P. Morgan Asset Management to launch a new investment style: Smart Alpha portfolios.

Nutmeg and J.P. Morgan Asset Management – working together  

As a wealth manager, Nutmeg know that providers and clients can only grow together, and that evolution is integral to this journey. That’s why we’ve partnered with J.P. Morgan Asset Management, one of the world’s leading investment houses with a 150-year history of building innovative solutions to meet real client needs. 

Today, Nutmeg and J.P. Morgan Asset Management have joined forces to create a truly pioneering investment style that builds on both our core strengths: Nutmeg’s technology and digital experience and J.P. Morgan Asset Management’s market insights and deep research expertise. The result of this new synergy is an investment style that sits at the intersection of passive and active management. This means we can give clients the best of both worlds in a multi-asset portfolio that benefits from the diversification of passive management and the research-driven security selection of active management.  

This new investment style is Smart Alpha portfolios powered by J.P. Morgan Asset Management

The name recognises the intelligent way these portfolios are designed with the potential to achieve alpha (returns above the market) for our clients in three ways. 

Firstly: The use of J.P. Morgan Asset Management’s multi-asset specialists, a team with a 50-year history of investing for institutions and professionals worldwide. These specialists inform Smart Alpha portfolios’ long-term (strategic) asset allocation. 

Secondly, Smart Alpha portfolios have the ability to be flexible around this long-term asset allocation, allowing us to manage risk and capture opportunities at different stages of the market cycle.  

Thirdly: Nutmeg and J.P. Morgan Asset Management have added to these capabilities a means to make smart security selections within active exchange traded funds (ETFs). These smart selections are made based on the insights of J.P. Morgan Asset Management’s research analysts with the aim being to capture returns in excess of the market benchmark (alpha). 

How do these smart selections seek to gain alpha? The active ETFs we use allow us to move overweight in certain positions that J.P. Morgan Asset Management’s analysts expect to perform well and underweight in those positions they expect to perform poorly. This gives us the ability to move above and below market benchmark positions, delivering greater potential returns with similar risk to the overall market. 

Our commitment to sustainability and transparency 

Smart Alpha portfolios are underpinned by Nutmeg & J.P. Morgan Asset Management’s shared commitment to sustainable investing. The active part of the Smart Alpha portfolio is environmental, social and governance (ESG) integrated, meaning that ESG considerations are factored into research and investment decisions. The active equity ETFs promote sustainable business practices and exclude operators in sectors that many clients tell us they would like to avoid. Crucially, Smart Alpha portfolios powered by J.P. Morgan Asset Management is also underpinned by the same level of transparency and control that Nutmeg champions in all its portfolios, so those who select it as their favoured investment style will always be able to track performance and see exactly where and how their money is being invested. 

Smart Alpha portfolios represent an evolution in investing because it brings together Nutmeg’s technology with J.P. Morgan Asset Management’s research intelligence, and combines this partnership in an investment style that uses both active and passive ETFs with the aim of achieving market-beating returns.

Smart Alpha portfolios are now available, exclusively for all Nutmeg ISA, LISA, JISA and general investment account customers. 

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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 and future performance indicators are not reliable indicators of future performance. Tax treatments apply. 

 

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James McManus

James is chief investment officer at Nutmeg, having joined in 2015 from Coutts & Co. A self-confessed ETF geek, James is regularly quoted in the national and industry press and has been voted one of Private Asset Manager’s ‘Top 40 under 40’ in each of the last three years. James holds a BSc in International Business from Nottingham Business School, the CFA UK Investment Management Certificate, and the CFA Certificate in ESG Investing. He can be found tweeting @j_a_mcmanus


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