Micro-investing is the new game for digital investment companies. Raiz Invest has updated its app with a rewards program that tops up users’ portfolio, while Commonwealth Bank’s CommSec has launched Pocket app, which facilitates very low minimum investments.
In a letter to its customers, chief executive George Lucas announced that the app’s latest update includes a new feature Raiz Rewards, which gives a percentage of cash back to its users when they shop online through its partner brands.
The rewards program has 200 retailers, with the likes of Woolworths, The Iconic and Apple. The cashback will automatically be reinvested into the user’s investment portfolio.
Lucas says: “What all these extra services and features mean is that Raiz is becoming a more integrated financial service solution, not only by allowing you to build savings and oversee your investment portfolio, but to track your expenditure through My Finances. Eventually it’s our goal to offer a debit-like card for spending.”
CommSec is targeting the same space as Raiz with the launch of its new Pocket app, which breaks down the barriers to investing with its minimum investment starting at $50 (compared to the usual $500 for listed securities) into a range of ETFs.
According to CommSec, just 4 per cent of Australian adults trade online in the sharemarket and the app aims to increase this by offering ETF options that cover local and global industries and regions.
Like Raiz, Commsec Pocket app offers automated regular investing in time with users’ savings or salary cycle.
Executive general manager of CommSec Richard Burns says: “As Australia’s largest digital broker, we know that many people find investing in shares out of their reach or too complex. We’ve broken down those barriers by significantly reducing the amount needed to get started, reducing the cost of investing as well as simplifying choice.”
Unlike Raiz, Commsec Pocket users can choose from seven ETF themes. They include an “Aussie Top 200”, an emerging markets ETF, a global healthcare companies ETF, global 100, sustainability leaders, “Aussie dividends” that pay above-average returns and a “tech savvy” which includes the top 100 tech and non-financial NASDAQ companies.
Commsec Pocket will be offered at $2 brokerage for trades up to $1000 and 20 basis points for trades above $1000. Investors pay only when they trade with zero ongoing account keeping fees.
This compares with the usual brokerage fees of around $10 to $25, which are offered by most trading platforms.
Burns says: “CommSec Pocket is our latest innovation that will help empower more Australians to grow their wealth. We will continue to listen to our customers and find new ways to help all Australians access the opportunities the sharemarket can bring.”
According to Raiz, it has received many requests for a debit card and an investment portfolio offering Bitcoin. The process to for the debit card has begun.
Lucas says: “Hopefully, neither will prove insurmountable, and you can be assured we are actively investigating how it might be possible to deliver both features.”
Raiz’s Conservative portfolio achieved outperformance with the one-year return at 6.9 per cent compared with the Chant West benchmark at 5.6 per cent for the same period.
The Moderately Aggressive portfolio earned 8.7 per cent and the Emerald portfolio earned 10.9 per cent, outperforming the Chant West benchmark of 7 per cent.
The Commsec Pocket ETFs include: iShares Core S&P/ASX 200 ETF; iShares Global 100 ETF; iShares MSCI Emerging Markets ETF; SPDR MSCI Australia Select High Dividend Yield Fund; BetaShares NASDAQ 100 ETF; BetaShares Global Sustainability Leaders ETF; iShares Global Healthcare ETF.