Breaking the mould to build one of the most recognised robo advisors in the UK is no mean feat. But Shaun Port has been working at it since 2012 with Nutmeg smashing assets under management of £1bn late last year.
His path to Nutmeg started at Birmingham University where he studied mathematical economics; we ask him about the rest of his journey to becoming CIO at the robo adviser.
How did you get into the ETF industry?
Shaun Port: ETFs sort of chose me. When I designed the Nutmeg investment process, I wanted to ensure four things: (a) that I would always know what we were actually invested in, down to every single security (b) that the investments were very liquid and easily tradeable (c) that costs were very low and going lower, and (d) that the business would be highly scalable. The only instrument that completely fitted the bill was ETFs.
What has been the defining/proudest moment of your ETF career?
SP: In November 2018, we launched Socially Responsible Portfolios, together with reporting on environmental, social and governance factors across all of our portfolios, not just the socially responsible ones. We believe we are the first wealth manager to do this.
What has been the proudest moment outside of your career?
SP: Racing in the EasyKart World Finals in Italy, competing against racers from 27 countries around the world. Unfortunately, I didn’t make the main ‘A’ final, but it I loved every minute of it!
What are your goals over the next five years?
SP: Develop Nutmeg into the largest and most advanced digital wealth manager in the world.
Fully digitise financial advice, to solve the advice gap.
Lead the adoption of sustainable investing; I expect Environment, Social and Governance (ESG) focused portfolios to be the default way people invest in five years’ time.
What do you do in your spare time?
SP: At weekends I compete in a national karting championship. It’s a good distraction from financial markets, although racing with very competitive 16-year old’s can be really tough!
How do you anticipate the ETF industry will evolve in the next ten years? OR Do you think the ETF industry is missing anything?
SP: It is going to get a lot bigger, fast. Europe is catching up with the US, and actually leading in a few areas – like ESG and to some extent fixed income. And I think Asia is a massive opportunity for ETFs, as local regulators increasingly focus on fee transparency and removing trail commissions.
What challenges does the ETF industry currently face?
SP: In Europe, ETFs haven’t caught on as a retail investment product - they are still institutional tools. That’s a big shame. Investment platforms are not doing enough to support ETFs, both for private investors and IFAs.
How does your company differentiate itself from its competitors?
SP: We’ve built our business upon the efficiencies and benefits that ETFs bring, like super low cost and massive scalability. We focus our efforts on getting the best out of ETFs, quite unlike any firm in the UK wealth sector. For example, we have a specialist in-house ETF trading team, working with market makers across Europe, to optimise our trading execution. We have developed fractional shares ownership, so clients can hold one pence in any ETF, rather than one share costing over £100 for example – so cashflows, like dividends, are re-invested across the entire portfolio. And we actively support new ETF launches, to get the best products for our clients.
What is your favourite ETF and why?
SP: Unfortunately I can’t buy my favourite ETFs as it is listed in the US – it is VTI, the Vanguard US Total Market Index. With exposure to over 3,600 US companies and costing just 3 basis points, this is an incredible piece of financial engineering.
What job would you have if you weren’t working in the ETF industry?
SP: I would still be working in investment, just having less fun.