I was recently checking the potential benefit of micro-investing via Raiz Invest, when I saw they were increasing their management fees. So when I stumbled on an article this week covering the release of the new CommSec Pocket offering, and I started to ask myself is it really worth it?
Please note: Ultimately content in this post (and blog overall), is just my opinions/thought process. This is should not be counted on as financial advice. This information is offered independently, with no commission/affiliation with the products mentioned below.
What is CommSec Pocket?
It is a product aimed to simplify investing in Exchange-Traded Funds (or ETFs), while also reducing the initial amount of funds needed to buy into the share market.
The ETFs on offer cover seven different categories, including local stocks via the ASX200, Health, Environment, Dividends and/or Global stocks.
What are you actually investing in
Here are the current investment options available to you:
CommSec Pocket ‘Option’
|What you are actually getting|
|Aussie Top 200||IOZ (iShares Core S&P/ASX 200 ETF)|
|Aussie Dividends||SYI (SPDR MSCI Australia High Dividend Yield Fund)|
|Global 100||IOO (iShares Global 100 ETF)|
|Emerging Markets||IEM (iShares MSCI Emerging Markets ETF)|
|Health Wise||IXJ (iShares Global Healthcare ETF)|
|Sustainability Leaders||ETHI (BetaShares Global Sustainability Leaders ETF)|
|Tech Savvy||NDQ (BetaShares NASDAQ 100 ETF)|
Lowering the bar to entry
The new app, allows you to buy these types of investments for a minimum of $50. Which lowers the bar substantially for would-be investors who are just starting out, and may not have a min. $1000 to invest.
Is CommSec Pocket worth it?
The big question is, is CommSec Pocket worth it? Now I can’t answer this for your situation, as it will vary from mine. But I can start with a comparison of Raiz Invest… Afterall, I assume is the target market CommSec is chasing…
- Maintenance Fee: $2.50/mth if balance under $10k
- Underlying Issuer Fee: Ranging from 0.224% to 0.428% depending on investment selection
- Brokerage Fees: n/a
- Minimum Investment: $5
Things to note:
With Raiz, you can currently only select one investment option too.
And the investments, are held in a trust on your behalf. Which means you ultimately don’t own the stocks/investments.
- Maintenance Fee: $0/mth
- Underlying Issuer Fee: Ranging from 0.09% to 0.67% depending on investment selection
- Brokerage Fees: $2 for investments under $1000 or 0.2% if over $1000
- Minimum Investment: $50
Things to note:
Firstly, you will need a CommSec/CommBank Customer ID.
You have up to 7 options for investments, so you can pick and choose.
All investments are CHESS Sponsored, meaning they are held in your name and you effectively own the ETFs you have bought.
Overall, this product is quite an interesting offering.
You will need to balance out the choices available in this product versus ease of use aspect.
But when starting out, the choices and options available to you are confounding. Sometime the paradox of choice, is a big enough barrier in itself, simply because there is too much choice available… “Where do I start?!”
So by stripping this back into a very simplified offering with very low threshold for entering the stock market, I can see this product gaining traction in Australia.
Pricing is also very attractive, even when you compare it to CommSec’s traditional offering via online share trading:
If you can live with the limited ETF options, and investing less than $10,000 – CommSec Pocket seemingly comes out in front on brokerage fees.