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We review the performance and positioning of the Nutmeg Smart Alpha portfolios, powered by J.P. Morgan Asset Management. 

In November 2020, we launched our Smart Alpha portfolios in collaboration with J.P. Morgan Asset Management. Fresh from celebrating their first year of availability, it’s the perfect time for us to recap on what these portfolios are, how they work, how they are invested, and how they have performed.

This video brings together our chief investment officer, James McManus, alongside Katie Magee, an investment specialist at J.P. Morgan Asset Management.  

As James makes clear, the Smart Alpha portfolios have fast become a core part of the Nutmeg line-up, offering a best of both worlds approach that bridges both the cost-efficient diversification benefits of passive investing and the research-driven security selection of active management.  

Katie explains J.P. Morgan Asset Management’s role; building the diversified, multi-asset portfolios, then using active insights to seek returns in excess of their benchmarks though active security selection.  

So, tell me about performance 

All Smart Alpha portfolios delivered a positive return in their first 12 months. The highest-risk portfolios, which by their nature have more exposure to risk assets – in this case, equity markets – gave the strongest returns over the period, relative to more balanced and conservative portfolios.  

At launch, the portfolios were positioned slightly overweight risk assets relative to J.P. Morgan Asset Management’s long-term strategic asset allocation. Within fixed income, the portfolios have been overweight high-yield and emerging market debt, and underweight core investment grade fixed income. 

However, given how the overweights have performed, in October the managers took the opportunity to trim the winners and bring down overall risk exposures slightly.  

A word on sustainability  

Our clients often ask about sustainability, and so it is worth noting that the Smart Alpha portfolios are underpinned by Nutmeg and J.P. Morgan Asset Management’s shared commitments in this area. The active part of the Smart Alpha portfolios is ESG integrated, meaning that environmental, social, and governance considerations are factored into the research and investment decisions.   

The Nutmeg Smart Alpha portfolios have been built specifically for investors who believe that in-depth stock selection can add to performance, while providing the benefits of liquidity, diversification, and cost effectiveness. Strict risk controls, transparency and low costs mean we believe these portfolios are a smarter way to access alpha.  

The portfolio range is available exclusively for all Nutmeg ISA, Junior ISA, Lifetime ISA, pensions and general investment account clients.   

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 performance and forecasts are not reliable indicators of future performance. Tax treatment depends on your individual circumstances and may change in the future.