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Moneyfarm expands investment range with low cost passive fixed allocation portfolios

Moneyfarm, the digital wealth manager, has announced it has expanded its investment range with the launch of a range of fixed allocation portfolios with 5 different risk levels.

These are a lower cost option, for more experienced investors who understand market fluctuations and long-term investing, starting from as low as 0.25%** for both the classic and socially responsible range. This suite of portfolios provides long term investment returns and grows the value of wealth over time.

A fixed allocation portfolio is built in much the same way as Moneyfarm’s actively managed portfolios, but they are designed to have low-intervention after this. There are no tactical changes to the portfolios, and they are rebalanced once a year. If the portfolio allocation drifts too far from the models, then it will also be rebalanced.

Due to this investment approach, the fixed allocation portfolios are lower cost, because they require less time to manage, but clients are still assigned a portfolio that fits with their long-term goals and risk attitude.

*Peer groupPortfolioMin investmentManagement Fees
MoneyfarmFixed Allocation£5000.25 to 0.45
Fully Managed£5000.35 to 0.75
NutmegFixed Allocation£5000.25 to 0.45
Fully Managed£5000.35 to 0.75
WealthifyFully Managed£10.60%
PensionBeeFully Managed£10.25% to 0.95%

For some clients, cost is a key decision making factor, in particular for more experienced investors who understand market fluctuations and long term investing. Until now, Moneyfarm has only offered clients actively managed portfolios, but it has become clear that there is demand for the same high level of investment expertise, but through fixed allocation portfolios.

Moneyfarm has a unique tiered fee structure, a ‘stepped’ one, that is straightforward and easy to understand when compared with other digital wealth managers such as Nutmeg. Moneyfarm’s actively managed portfolio fees are among the lowest in the market and the newly launched fixed asset allocation portfolios match Nutmeg’s pricing up to £100,000, and are cheaper for larger portfolios.

 

Management Fee Charge

Investment AmountMoneyfarm (Fixed)Nutmeg (Fixed)PensionBee (Tracker)
£20,0000.45%0.45%0.50%
£100,0000.35%0.45%0.50%
£250,0000.30%0.33%0.35%
£500,0000.25%0.29%0.30%

Richard Flax, Chief Investment Officer at Moneyfarm said: “At Moneyfarm, we believe in low-cost and globally diversified investment portfolios. We have been very successful with our active and socially responsible portfolios, but identified a gap in our product range.  That is why we have launched a range of fixed-allocation portfolios that offer the same simple and intuitive digital investment experience to clients who are more confident and understand market volatility. These portfolios will be rebalanced once a year and by doing this, we can reduce fund costs providing these more experienced, price sensitive investors access to a diversified portfolio at an even lower cost, matched to their risk profile.

Giovanni Daprà, Co-Founder and CEO at Moneyfarm added: “We constantly look at how we can improve our proposition and service to clients, adding more investment options as the socially responsible ones that we launched last year. But one area that we know was missing was the ability to offer fixed asset allocation portfolios. 

“Fixed allocation portfolios aren’t for everyone as they are only rebalanced once a year, so tend to be appropriate for more experienced investors and those who are more cost conscious, that might not necessarily believe in the value of active management and don’t need the peace of mind that someone is constantly looking and managing their chosen portfolio. We have tested the offer with clients and they are very keen to have this as an option.”

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