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Not sure I would class that as a good deal even over 4 months, acceptable but not great
These are people who trust the marketing on the platforms and pat themselves on the back without realising how much they could’ve saved with vanguard or fidelity etc.
Who is patting themselves on the back and who doesn’t realise the cost elsewhere? You sound delightful.
My SIPP costs 0.13%.
I transferred a realitvely small amount of £50k cash that I will likely need early next year. I paid approx £350 in Nutmeg fees, set against 50k avios and £1,720 in growth.
My cash ISA would have earned about £1k over the same period, with no avios.
Well I transferred it out from Interactive Investor and it’s going straight back again (Into a Vanguard Lifestrategy fund which has gone almost exactly nowhere since early August) – I’m very very fee conscious and Nutmeg’s are high.
When I was thinking about whether to pull the trigger I assumed that the Vanguard and Nutmeg fund movements would be broadly correlated, and so the value of the ISA would be roughly the same regardless i.e. I ignored it…the 1% increase is a bonus
So my calculation is that it’s cost me £320 to get (min) £3000 worth of Avios. That’s not a 2% return…
approx £350 in Nutmeg fees
Sorry, typo, £150 in fees
Well I transferred it out from Interactive Investor and it’s going straight back again (Into a Vanguard Lifestrategy fund which has gone almost exactly nowhere since early August) – I’m very very fee conscious and Nutmeg’s are high.
When I was thinking about whether to pull the trigger I assumed that the Vanguard and Nutmeg fund movements would be broadly correlated, and so the value of the ISA would be roughly the same regardless i.e. I ignored it…the 1% increase is a bonus
So my calculation is that it’s cost me £320 to get (min) £3000 worth of Avios. That’s not a 2% return…
Why lifestrategy? Genuine question
£3000 worth of avios (min value, could be more depending on how you use them)
£3000 increase in value ignoring feesSo £6000 on £300000 is 2%
Why lifestrategy? Genuine question
£3000 worth of avios (min value, could be more depending on how you use them)
£3000 increase in value ignoring feesSo £6000 on £300000 is 2%
Mainly because I’m sure that passive / index investing is better than active…and I’m too lazy to manage a more complex portfolio! You pay a (small) premium for the fund of funds model (and the auto re-balancing) but I’m happy with that given how low cost the platform (II) is.
Have a read of this Monevator article if you want a better argument than I can make! https://monevator.com/vanguard-lifestrategy/
It is interesting how different people see the return calculation here differently. For me, I ignore the £300K completely. I see it as a number that will go up/down with the market so I don’t care much where it sits for a few months. I’m not spending it, locking it away or putting it at any additional risk. The *only* thing I focused on was the additional fees I’d pay to Nutmeg vs II for the period I had it invested wth them…which is the £320. So for me this is a “10-bagger” – a 10x return on my investment.
One of the reasons someone might choose Life Strategy over a straight world equity index fund is for asset allocation purposes. While equities (and particularly the reinvested dividends) have provided the best total returns over many long periods and equities were something of a one way bet vs bonds for many years of this century, bonds/bond yields now look like very different/attractive proposition. Life Strategy should capture both this important effect plus all important currency asset allocation.
P.S. the movements in the £300k matter rather a lot in this inflationary environment. £300k invested in January 2021 would need to be about £385,000 today just to have kept up with inflation, i.e. before any real return on the investment.
My cash ISA would have earned about £1k over the same period, with no avios.
Are you really comparing like for like? You talk about sipp then compare it with cash isa?
The *only* thing I focused on was the additional fees I’d pay to Nutmeg vs II for the period I had it invested wth them…which is the £320. So for me this is a “10-bagger” – a 10x return on my investment.
The cheapest nutmeg option is 0.7%, cost for 300k for 6 months is 1050. Most expensive isa in ii is 20 per month. Not sure how you arrived at 320.
Even if you add a life strategy fund, which is reasonably comparable, it’s 0.22% of fund costs.The cheapest nutmeg option is 0.7%, cost for 300k for 6 months is 1050. Most expensive isa in ii is 20 per month. Not sure how you arrived at 320.
Even if you add a life strategy fund, which is reasonably comparable, it’s 0.22% of fund costs.Helpfully – the Nutmeg app tells me “All Time” Nutmeg fees – which as of this morning are £316.64.
They charge platform fees 0.45% on the first £100K and then 0.25% above that, so:
£100K * 0.45% * 4/12 = £150
£200K * 0.25% * 4/12 = £167The headline 0.7% Nutmeg fee includes fund fees – which at 0.2% are a wash with the Lifestrategy cost as you say – those aren’t included in the £316 Nutmeg platform fees above.
(I’m paying the II monthly platform fees for trading account, Junior Isas and SIPP anyway – so no impact to them from all of this)
The cheapest nutmeg option is 0.7%, cost for 300k for 6 months is 1050. Most expensive isa in ii is 20 per month. Not sure how you arrived at 320.
Even if you add a life strategy fund, which is reasonably comparable, it’s 0.22% of fund costs.Helpfully – the Nutmeg app tells me “All Time” Nutmeg fees – which as of this morning are £316.64.
They charge platform fees 0.45% on the first £100K and then 0.25% above that, so:
£100K * 0.45% * 4/12 = £150
£200K * 0.25% * 4/12 = £167The headline 0.7% Nutmeg fee includes fund fees – which at 0.2% are a wash with the Lifestrategy cost as you say – those aren’t included in the £316 Nutmeg platform fees above.
(I’m paying the II monthly platform fees for trading account, Junior Isas and SIPP anyway – so no impact to them from all of this)
That makes sense, thanks.
Recently received the email below. Account was opened in 2020 & since been closed (due to poor performance benchmarked against others, as opposed to non-receipt of Avios)! Guess better late than never.
“we recently became aware of an issue that impacted the application of the Avios promotion you registered for when you opened your Nutmeg account. As a result, there has been a delay in adding the points to your Avios account.
Having fully investigated the issue, we have now requested for your Avios points to be applied. You will see this reflected in your Avios account in the coming days”
Helpfully got an email from Nutmeg this morning letting me know they’ve re-opened this offer (as far as I can tell on exactly the same terms as previously) – so that will be another 300K Avios I’ll be signing up for then! It’s actually been active since 25th June – and will run until 25th September so no mad rush.
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