Robo-adviser Nutmeg has teamed up with parent firm JP Morgan to launch five risk-rated income investing portfolios.

The new portfolio range will be available to Nutmeg clients from later this month. 

The range leverages a number of JP Morgan Asset Management actively managed ETFs, The UK listed equivalent ETFs serve as the core of the Nutmeg Income Investing strategy, 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.

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The portfolios will offer an 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. 

Nutmeg was one of the first direct to consumer robo-advice firms, allowing investors to set up and manage their investments online.

The firm was sold to JP Morgan in 2021.

Nutmeg launched the new portfolios following research from showing frustration among retail investors with the current income investing options available. Nearly 1 in 6 UK investors (16%) told Nutmeg they are currently unsatisfied with the income they receive from their investments via dividends and bonds despite over two-thirds (69%) saying that generating an income from investing is important to them.

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

There is a minimum investment of £10,000.

Clients will pay no Nutmeg management fees on their Income Investing pots in 2025, just paying the fund costs.

From 2026 fees will depend on the size of the investment. Current Nutmeg management fees are 0.75% up to £100,000, with 0.35% on anything over. Income Investing portfolio fund costs are 0.21%, and there’s a market spread fee of 0.04%.

The portfolios are only available to clients using General Investment Account or Stocks and Shares ISA. Nutmeg plans to add the portfolios to its personal pension offering in the future.