Nutmeg, the J.P. Morgan owned digital wealth manager, is partnering 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 the success of their existing partnership.
The new portfolio range, exclusively available to Nutmeg clients, leverages a number of JPMAM actively managed ETFs including 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.
The product launch comes as new research from Nutmeg shows frustration among retail investors with the current income investing options available. Nearly one in six UK investors (16 per cent) say they are currently unsatisfied with the income they receive from their investments via dividends and bonds despite over two-thirds (69 per cent) saying that generating an income from investing is important to them.
Nutmeg writes that it will offer an innovative 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 J.P. Morgan owned digital wealth manager Nutmeg, says: “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. By launching Income Investing in partnership with J.P. Morgan Asset Management, we’re able to bring an intuitive and advanced investment offer to UK investors – managed by our experts and paying monthly income to our clients.”
The firm writes that 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 GBP1 billion in assets. The firm writes that 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 says: “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.”
James McManus concludes: “Most people invest so their money will, one day, be working harder than they are. While that day may be further off for some, we know that many people want a regular, consistent income stream from their investments that can provide more flexibility in life today. By building on the success of our partnership with J.P. Morgan Asset Management, we aim to give investors access to globally diversified, risk-rated portfolios that can help them achieve their financial goals both now, and in the future.”
