Nutmeg, which grabbed attention back in 2012 as a crop of new "robo-advisors," and now backed by the US bank, is broadening the range of portfolios for clients seeking more options in income.

Nutmeg, a JP Morgan-owned firm, is partnering with JP Morgan Asset Management to offer a range of five risk-rated income investing portfolios.

The new range is exclusively available to Nutmeg clients and uses JPMAM actively managed exchange-traded funds, such as the JP Morgan Equity Premium Income family of ETFs. The portfolios aim to pay clients regular income, while leaving capital invested in the market, Nutmeg said in a statement yesterday.  

The 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 “overweight” and “underweight” positions.

Nutmeg said its new research shows that retail investors are frustrated at the limited options for income investing. Nearly one in six of the UK investors (16 per cent) it surveyed said they are not satisfied 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. The findings came from an Opinium survey of 1,000 UK investors undertaken between 7 and 13 May.

The firm said it offers an “innovative income smoothing feature to tackle the inconvenience of irregular income payments due to varying dividend payment schedules of underlying assets.”

“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,” James McManus, chief investment officer at Nutmeg, said. “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.”

Nutmeg and JP Morgan AM have worked together since November 2020, when they partnered to offer the Smart Alpha portfolio range, which has attracted over 54,000 investors and over £1 billion ($1.35 billion) in assets. 

Income Investing Portfolios will be available for Nutmeg stocks and shares ISAs and general investment accounts from Tuesday 17 June. Clients will not pay Nutmeg management fees on their Income Investing pots in 2025. There is a minimum investment requirement of £10,000.