Raiz Invest hands-on review | Micro-investing apps Australia


Hi, I’m Kylie. I’m the investments editor
here at Finder. And you may have noticed that Raiz has recently done an update. So I figure
it’s a great time to do a hands on review of the latest features, including investment
options, shopping features, my personal experiences, and whether I think it’s a good return on
investment for your money. So what is Raiz? Raiz is a popular micro investment app that
launched in Australia in 2016. But if you live in the US or the UK, you might know it
as the Acorns app and made a name for itself mostly thanks to its roundup feature which
collects your spare change and invest it into a portfolio of exchange traded funds. So say
you make a purchase of $1.90. It rounds up to the dollar by collecting the 10 cents and
investing it into the portfolio and increments of $5 at a time plus. As a bonus, if you use
the app to do your online shopping, a portion of that is automatically invested for you.
So here we’ve got the homepage which is the today tab and you can see his straightaway
you’ve got your investment portfolio balance, your Super balance, if you use the super fund,
and you’ve got your shopping rewards balance as well. And if you scroll further down here,
you’ve got your performance chart so you can see how much your fund is going up over different
time frames, which is really cool. And then you’ve got the my finance tab, which gives
you a really great rundown of what you’re spending your money on from month to month.
So in the past tab, you get a summary of all your transactions, including withdrawals,
the returns, how much you’re getting in dividends from each of the ETFs. I really like how transparent
this is. The only thing missing here for me is the fees. And then over in the future tab,
you have a nice chart which shows how much you’re going to have in your fund by the time
you reach a certain age. So how do you invest? Like I said before, the standout feature for
Raiz is its roundup change feature which collects your spare change and investment into the
fund. You can also make one off investments or you can set up regular payments, daily
monthly or fortnightly if you like when you sign up for rise you get six investment options
to choose from based on your risk profile, from conservative all the way to aggressive
plus the ethical fund, which is Emerald. So your risk profile basically refers to how
much risk you’re willing to take on for the chance to get a higher return. So the conservative
fund here is the least risky option. But it’s also the least likely to give you a high return
when you eventually cash it. With the aggressive fund, there’s a high chance of your portfolio
going backwards because of stock market volatility. But when you cash in at the end over a long
time frame, there’s a better chance you’ll get a nicer return. So if you click through
to the portfolios, you can see your investment options. You can see here that the each of
the portfolios have the same ETFs themes. And if you click through to them, you can
see the actual name of the ETFs here, its performance over the last year and you can
see some of the companies that it’s following. So each portfolio works by investing different
portions into each of the different ETFs based on risk profile. So with the conservative
fund, invest the nice into the bond and cash ETFs which are the safer investments and then
over in the aggressive fund invest more into the Australia large cap and Asia large cap
stock funds which are a little bit risky. And then you’ve got the Emerald portfolio
which has invested into two ethical ETFs plus the Australia bonds and Australia cash ETF.
Alright, let’s get into how that performed. I bought into the last Annual Performance
Report, the portfolios have returned around 8% on average with the conservative fund,
the bottom performer at 6.9% and the Emerald fund, the best performer at 10.1% after fee.
So I think these returns are pretty good but not incredible as a basic comparison we can
put it next to the performance of CommSec Pocket’s funds, as you can say CommSec Pocket
has outperformed Raiz’s ETFs but by that same token, because you’re investing in just one
ETF with CommSec Pocket, it’s probably going to be a little bit riskier than than investing
with Raiz which is very diversified because it’s a whole portfolio of ETFs. And you can
also compare it to the ASX200 index, which is a basic benchmark for investment performance.
So in the last financial year, the ASX200 index has performed exceptionally well. So
in that sense Raiz’s portfolios have underperformed the benchmark, but will it continue to do
so? It’s hard to say. So what are the costs, Raiz charges $2 50
a month for balances that are under $10,000. And for balances that are over $10,000, it’s
0.275% a year. So breaking that down further, if you have an account of say $1,000, that’s
around 3% in fees each year. As far as investment phase go for smaller balances, that’s not
amazing. As a general rule of thumb, you try to keep your face below say the 1% mark. But
on the other hand, you don’t have to pay brokerage fees, which is a big advantage over other
apps say like CommSec Pocket which charges $2 a fee every time you make a transaction.
Now the shopping feature. The shopping feature is often ignored and reviews, but it’s a really
nice addition to the app and it does go some way towards making up for the fees. So using
Raiz, you can browse through over 200 brands. So when you shop through the app, you automatic
get a percentage of what you paid back to you, which is automatically invested into
your fund. So as you can see here, you can browse through the names, and it shows you
how much they’ll return to you, which is really nice. And these aren’t just no name brands.
There are some really big names in here that you engage with pretty regularly. So I love
the design of this app. I think it’s slick. It’s fun, and it’s easy to use. And I’m also
a really big fan of the roundup feature, it’s a really great way to invest your money without
having to think about it just through everyday purchases. And that’s why I started using
the app in the first place. I also really liked the shopping feature. There’s some great
brands in that. And I like that you get a cash reward back to you as an investment as
if I needed an extra excuse to go shopping. So it’s great that there’s no brokerage fee
means that you can invest as much as you want day to day without having to think about the
extra costs. The investment options are a nice mix of ETFs and they’re relatively safe.
So even when you have the aggressive portfolio, you’re probably not going to see your money
going backwards over a lengthy time period and you get the ethical portfolio option which
is actually outperformed the others In the last financial year, but on the other hand,
the $30 a year account fee is a little bit steep, especially if you’re not adding much
to the account. So if you’re just doing roundups, your returns might end up being swallowed
completely by the fees. There are a few roundup apps now just for savings accounts. So you
might even be better off just using one of those. So you don’t get the freedom of choosing
which ETFs you want to invest in as you would with a regular trading platform, or even other
micro investing platforms like CommSec Pocket, but you do get a professionally selected portfolio
of ETFs based on your risk profile, which is what you really want from a robo advisor.
So what did you think of the app? Let us know in the comments below. And if you want any
more information about other trading platforms or if you want more information about Raiz
you can follow the links in the description.

11 Replies to “Raiz Invest hands-on review | Micro-investing apps Australia

  1. I've been using the app for almost 3 years now and am still a huge fan of it. Personal returns have been +8% per year (+24% total) just on Mod. Aggressive which I'm certainly happy with and even though it taught me more about investing and I now have several investments elsewhere which have performed better I still continue to use it because it's easy, no brokerage and the rewards system is really good especially if you regularly shop at Woolworths, Ebay or Dan Murphy's etc. I've earned enough out of that rewards system to cover their fees for the next 10+ years already 🙂

  2. Started using its ok if your new please check my link toearn 10 when you sign up . I am micro-investing with Raiz. If you join using this link, we will both get $10 when you use my invite code: https://app.raizinvest.com.au/invite/NRS9J3

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