Investing with Confidence: More young Aussies customising their ETF asset allocation
More Aussies aged under 35 are taking control of their investments in the Raiz Invest platform by switching to the Custom Portfolio, which lets them to build their own personalised portfolio asset allocations by choosing target weightings from a selection of ETFs and Bitcoin.
Launched earlier this year, the Custom Portfolio now has over 12,000 active accounts and more than $63 million in Funds Under Management (FUM). Of these active accounts, 20% are aged 18-24, whilst 43% are aged 25-34. In addition, the average balance in the Custom Portfolio is impressive sitting over $5250, compared to an average of $2790 in the other Raiz portfolios.
According to Raiz Invest Australian CEO, Brendan Malone, the popularity of the Custom Portfolio is a result of improving financial literacy amongst younger Australian investors.
“For many Raiz customers, the initial investment path was in to one of our seven diversified portfolios,” said Malone. “But over time, customers have deepened their financial knowledge and experience in investing, resulting in many more taking control of their investing in our Custom Portfolio option.
“At Raiz, we are passionate about financial education and hope our continued delivery of educational content is helping more Aussies take their investment to the next level.”
As a result of feedback from Raiz users, which reinforced its strategic direction, Raiz added two more ETFs to the available pool in the Custom Portfolio this month, which now sits at 16 ETFs and Bitcoin. The new ETFs are the Vanguard MSCI Australian Small Companies Index ETF (VSO.AU) and the Vanguard Ethically Conscious Globally Aggregated Bond Index Hedged ETF (VEFI.AU).
“We are thrilled the VEFI gives Raiz customers an additional option in the socially and ethically responsibly themed ETF space, which is so important to offer at this time,” said Malone. “The VSO provides exciting potential with exposure to small caps, which is attractive to people who perhaps want to follow the evolution of a company in Australia from small to large cap, with AfterPay and Zip as two great examples.”
Nineteen-year-old York Dalton, a Raiz customer in Newcastle, New South Wales, says he was attracted to the Custom Portfolio by Bitcoin.
“I started using Raiz to invest and save as soon as I could, and recently made the switch to Custom Portfolio to take more control of my investments,” he said. “Because I am really interested in crypto, the ability to invest in Bitcoin through Raiz has been awesome.”
For 28-year-old Ellisa Bennett, a Raiz customer in Sydney, it was the ethical investments that encouraged her to switch to Custom Portfolio.
“I switched to Custom Portfolio because I really liked the idea of being able to have both ethical investments and crypto,” she said. “I just couldn’t choose between Emerald and Sapphire, but Custom Portfolio was so simple I felt confident in designing a portfolio that suits me.”
For 34-year-old Sydney-sider John Massey, it was what he learnt about ETFs and investing that led him to switch to Custom Portfolio.
“A while ago I didn’t even know what an ETF was,” he said. “But Raiz made it so simple to get up to speed on investing, plus I really like to back myself. In learning about investments and then getting to decide where to invest my own money, it was a game changer for me.”
The Custom Portfolio has a different fee structure – $4.50 per month for balances less than $20k, or 0.275% p.a. for balances equal to or greater than $20k. But this fee, like the other Raiz portfolios, covers unlimited deposits, withdrawals, and any adjustments customers make to ETF and bitcoin weightings within their Custom Portfolio, all without any additional brokerage or other fees.
Raiz Invest August key metrics continue to show growth with total FUM increasing to $967.4 million, an increase of 6.9% compared to the prior month, and active customer growth in Australia up by 1.5% to 286,789. These latest numbers demonstrate Raiz is ahead of schedule to reach its $1 billion target of FUM by 31 December this year.
Disclaimer: A Custom Portfolio will not suit everyone. Raiz encourage customers to read the PDS and consider the risks and whether it is suitable for them. Please also keep in mind that the Custom Portfolio is not designed to be used as a trading tool and the trading they do at Raiz to rebalance portfolios only happens once a day.
