Nutmeg democratises wealth management using ETFs
A desire to work as close to the markets and a love of finance drove Rumi Mahmood to his current role as Investment Analyst at Nutmeg. He started his career as an engineer in the oil industry and then moved over to finance, working at Bank of New York Mellon in global securities.
Mahmood will be joining etfLIVE Europe’s programme in the How to Trade your ETFs panel.
From BNY Mellon, he joined Nutmeg, a digital wealth manager, aiming to democratise wealth management, which manages some GBP2 billion for over 80,000 largely retail clients, all managed through ETFs.
“ETFs serve as an excellent tool,” he says. “They are easy to trade and the fact that they can be bought and sold on the secondary markets means you can trade intraday quickly. They can offer a level of transparency and liquidity which is very important to us given that our main consumer base is retail investors.”
Nutmeg does run some mandates for institutional customers, particularly those drawn from the big four accountancy firms who have a conflict of interest in terms of investing in financial institutions for which they might be conducting an audit. They also run portfolios for one of the largest retail banks in Taiwan.
Mahmood is responsible for ETF research, selection and due diligence and is part of the asset allocation team, chairing fund selection committees.
Nutmeg trades on average twice a week but this is subject to change intraweek depending on the investment team views.
The firm’s experience during the high level of market volatility experienced earlier this year was that they were able to achieve prices they were happy with. “We paid higher spreads but in the context of the volatility we were facing we achieved good prices,” Mahmood says.
Dedicated specialist ETF marketmakers were noticeably more active than firms that offer broking as part of their all round services, he says.
“The volumes of trading in ETFs, and ETFs as a share of market volume in the US and Europe went up significantly as investors sought liquidity at that time” he says. “We were able to achieve access to liquidity and good prices even in some of the more strained assets classes at the time such as corporate bonds.”
2018 saw Nutmeg launch a Socially Responsible portfolio offering, due to client demand.
“It is a series of managed portfolios that are risk graded and follow SRI index-tracking ETFs. We felt the socially responsible ETF market had reached the stage where enough products had been launched to meet our standards,” Mahmood says.
“With the advent of more products, some of which we have seeded in the SRI space it’s been possible to build strong globally diversified multi-asset SRI portfolios with access to almost every asset class - even high yield corporate bonds.”