Maturing robo advice market delivers a smoother path for investors

As the robo advice market in the UK nears the £3 billion mark, the maturing sector has more meaningful track records and is offering everyday investors a less bumpy ride, says

According to independent financial advice site Boring Money’s quarterly analysis of nine of the UK’s leading robo advisers, all but two of the higher risk investment portfolios outperformed the FTSE 100 over the past 12-month and 24-month periods. These results also came with less risk than the FTSE – and the reassurance of over two years of track records.

Top line results reveal: 

  • Seven robo advisers can now show at least a two-year track record for some portfolios.
  • Over the past two years, if we look at the higher risk portfolios, from a starting £5,000 investment, the average robo adviser returned £5,895 compared to the FTSE 100 which grew to £5,862.
  • Averaging the performance of these robo advisers; high-risk portfolios returned 17.9% over the two years analysed, followed by 10.2% for medium risk and 2.3% for low risk portfolios. In comparison, investing in a passive FTSE 100 tracker would have returned 17.2% over the same period and a leading easy access cash ISA would have paid 2.3%.
  • The level of risk which investors are exposed to in terms of volatility is significantly reduced if assessed in terms of monthly swings in valuations, or monthly drawdowns in comparison to the FTSE 100.

Returns for higher-risk portfolios 

Nutmeg leads the charge when it comes to returns across both a one-year and two-year period. A £5,000 investment made in Nutmeg’s Portfolio 10 in October 2017 would have been worth £5,425 by the end of September 2018, while the same £5,000 investment made in October 2016 would have grown to £6,081. These returns are for the period to 30th September 2018 and are all calculated net of fees.

What is clear is that individual asset allocations for each risk grade differ significantly from provider to provider and the differences can be seen below.

Lower levels of risk 

In addition to delivering performance alone, arguably the other most important service offered by the robo advisers is the smoothing out of volatility, delivering diversified portfolios to retail investors.

We measure the inter-month drawdown as the most a consumer would have lost if they’d invested at the end of the month where portfolios were at their highest and then withdrew at the end of a subsequent month they were at their lowest.

By way of example, Scalable Capital offered the least volatile path for higher-risk investors over the year, followed by IG and then Wealthify. All offer a much smoother path than the FTSE 100 alone.

Boring Money CEO Holly Mackay comments, “The performance of the robo advisers over a two-year period is credible and also show the benefits of having a broadly mixed portfolio. As market volatility shows no sign of abating, the decision process for investors is as much about managing risk as it is about accessing performance. Most DIY investors show a strong home bias and robos can help to mitigate this.”

Here’s further detailed information on robo adviser performance for Q3 2018.



Notes to Editors:

  • Boring Money collected data from nine robo advisers as at 30th September 2019 – this includes, Evestor, IG, Netwealth, Nutmeg, Moneyfarm, Scalable Capital, True Potential Investor, Wealthify and Wealthsimple.
  • All figures are inclusive of fees, performance data includes the underlying investment charges and robo-adviser fees.
  • Low-risk’ portfolios are most like cash.
  • ‘Medium risk’ portfolios most closely map holding a 50:50 split between cash and the FTSE 100.
  • ‘High-risk’ portfolios are those which most closely map to the FTSE 100.
  • For the FTSE 100 we used a total return index and deducted charges of 0.31% – equivalent to a passive investment management fee of 0.06% and an assumed platform fee of 0.25%.
  • For the 50% FTSE 100 we used £2,500 invested in the FTSE 100 as per the point above, and £2,500 saved in a cash ISA.
  • For the Leading Cash ISA, we used the monthly interest accrued on the leading online easy access Cash ISA available during each month.
    • The figures for maximum drawdown are based on the worst outcome that an investor would have experienced by investing at a peak and then withdrawing their money at a subsequent trough. Monthly returns data were used, so investors may have experienced a greater loss within a month.
  • In the low risk portfolios, we have used the most comparable unconstrained portfolios for Nutmeg and Netwealth.
  • Full performance details for all three risk profiles are available from Boring Money.


Source: Boring Money


For media enquires please contact:

Vicky Taylor, Koozai


Cara Whitehouse, Boring Money



About Boring Money:

( is an independent research and content business which provides information, tips and Best Buys to consumers. The business conducts regular research with industry providers and consumers and looks at the developing DIY investment market from both the customer and provider perspective. Boring Money holds test accounts with over 25 providers and also holds regular focus groups and interviews with consumers to ensure regular input and feedback from the user perspective. Founder Holly Mackay has worked in the investment industry for 19 years and is supported by a team of 10 researchers, analysts and marketing execs. Boring Money is not regulated to give personal financial advice, nor is it regulated by the industry watchdog.

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