Let's go through the three popular investing apps in Australia right now.
I'm referring to these micro investing apps that are an app-based approach to investing in stocks and shares here through Australia.
No longer do you need to go through advisors or brokers to trade shares and stocks all in a handy, colourful app.
From my experience, it's such a simpler and cleaner way for beginners to more experienced investors to invest.
I will dive into the three key players today and show you what they can all do and individually how they might work for you.
- Raiz – Diversified portfolios made up of multiple ETFs
- Spaceship – An actively managed fund full of growth stocks
- Commsec Pockets – Broker for DIY trading of ETFs
Referral codes for Spaceship and Raiz
Currently, Spaceship and Raiz have bonuses for those creating new accounts. I know some of you might be looking for them so here they are at the top.
For Spaceship, receive a bonus $5 when you invest $5 for the first time, join here using code S8ADTAZTF5.
How do they work
Just like any app you download it onto your phone.
Because it's a financial investment product you will need to create and account, enter some personal details. You will need to setup a connecting account so it can direct debit money out of it when you want to invest.
To start investing money you will need to select a portfolio or investment option. Each app has their own differences as I will explain.
In terms of cost, you will pay a fee to either make a trade (buy or sell an investment) or pay a percentage fee based on your balance each month.
Are investing apps worth it?
Yes, they are. While they look flashy and might feel gimmicky, you can use these as a serious way to build wealth.
I've spent the last few years using and trying them out and have found them very worthwhile.
Yeah, they are nice to look at and easy to get going, but behind them are some pretty get mechanics to set you up with an investment portfolio.
I'll get into the differences between a few, but one good thing about these apps is that they are targeting the new investor so make it easy to get going plus help you out with some educational content.
You can get started with very little money – like $5 and work your way from there. It's like savings.
I'll note the important aspects you need to consider as I explain how these apps work.
What makes investing apps great?
These micro-investing apps have been around for the last 4-5 years. I took notice of Acorns when it launched in Australia (now known as Raiz) and have used it for over 4 years now.
A product like Raiz or Spaceship, and now Commsec Pockets have several features that make it an excellent option for investors:
You can literally download an investing app right now and sign up on the spot. Many of them use plain English and encourage new investors, so make it easy to understand.
Replace the full service stock brokers who give you advice and put trades in for you. They also replace the lean stock brokers who are platforms to buy and sell stocks. The investing apps are all in one and do the buy/sell steps for you.
Low barriers to entry
Most brokers need $500 at least to get started and even then your brokerage costs can be high. These apps reduce barriers. With Raiz or Spaceship you only need $5 to get started.
Some brokers charge $20,$30, $40+ per trade. That's money you spend just to buy something. Investing apps were built with low costs in mind. Comsec pockets for example only charge $2 a trade, so if you buy $500 worth of stock it's only a .4% expense.
For apps that create diversified portfolios like Raiz or Spaceship there is less paperwork and upkeep than if you bought ETFs or stocks individually. Personally, I hate all the paperwork that comes with stocks and can't seem to get it digitised.
With something like RAIZ you will invest in multiple ETFs but only have the one tax statement to handle. Simples.
Easy to automate
Set up recurring investments and get automatic rebalancing done, which you can't do this through traditional brokers
For example, you can set up $100 to invest in your app of choice every fortnight or month. This gets automatically invested and goes to work like your savings account word.
These apps are great for set and forget strategies where you want to set up a transfer and let the product do the rest.
These investing apps cater to the fact many of their users are first time investors. They might find out about trading and stocks for the first time because of the simplicity of the app.
New investors feel supported with helpful cues, tips, and updates from some apps that give you confidence and comfort around the investing process.
What investing apps are there?
Let's look at the most prominent investing apps in Australia – Raiz, Spaceship Invest and Commsec Pockets.
First came Raiz in around 2016, then Spaceship back in 2018 and since then CommSec Pockets was launched.
Even though each of the apps look and feel similar in terms of the way you access them, and send money into them there are some key differences.
- RAIZ have investment options to pick from built from ETFs
- Spaceship is like a managed fund where the team pick stocks actively
- CommSec pockets is more DIY where you select the specific ETF
That's a high level indicator that each are
I'll go into each and explain what they offer, then provide some reasons one or the other might be suitable for you.
If you want a simple, all in one place to build diversified wealth then Raiz is a great option
Acorns Australia was the original investing app in Australia. It was an offshoot of the American version which still exists today.
Now it's called Raiz and is an Australian listed company on the ASX.
Raiz is what I call a “do it for me” investment product.
You set up an account, pick a portfolio and add money to it. You can automate this all, so Raiz literally do it all for you.
Investing with Raiz
There are two ways to add money to Raiz. You can add in money manually or automatically (direct debited from your account).
Raiz gained popularity through what's called the “round up” feature.
When purchasing anything on a nominated account, for example, a coffee for $3.50, the cost is rounded up to the nearest dollar. So if you spend $3.50 then 50 cents is sent to Raiz. This is helpful if you are doing several purchases on a particular card. You'll find over time the pot is filling up.
This is how I started. I don't do this anymore as I contribute a set amount on a fortnightly basis instead but it's easy to turn on and off this feature which is not mandatory to use.
The beauty of Raiz is that they will take any amount of cash and invest it, which means they will buy a fraction of a share for you. No more do you need to wait until you have the exact price of the share to buy, you can do it straight away (for example $5).
There is also an option for investing on behalf of your kids. I haven't looked into this option even with two of my own, but there might be some benefits to doing this.
Raiz's portfolio options
Raiz has 7 prebuilt portfolios to pick from as well as an option to build your own custom portfolios (which I personally do).
The preset portfolios are made up of well established ETFs that are a mix of local, global stocks and bonds and cash. Eache portfolio has a different balance of stocks and bonds from the conservative option (22% stocks) to the aggressive growth option (90% stocks). These labels are similar to what you see for your superannuation.
Recently they added the Sapphire portfolio which includes 5% bitcoin, with 69% in stocks and the rest in bonds. Probably one of the easiest most diversified ways to get crypto into your investment portfolio.
In early 2021, Raiz released custom portfolios. This is a game-changer as it means you can build your own all in one diversified portfolio. You can pick which ETFs go in and how much of your portfolio they make up.
See my screenshot here of a test portfolio I built. Picking some ETFs (from the list of 14 provided) and then percent of the portfolio they each make up. Raiz tells you the risk scale, with more stocks or crypto meaning it will be higher risk.
The ETFs you can pick from include
- AAA – Cash ETF
- STW – Aus Large Cap Stocks
- IAA – Asia Large Cap Stocks
- IEU – Europe Large Cap Stocks
- IAF – Aus Bonds
- RCB – Aus Corporate Bonds
- IVV – US Large Cap Stocks
- RARI – Aus Socially Responsible
- ETHI – Global Socially Responsible
- FAIR – Aus Sustainable Leaders
- NDQ – Nasdaq 100
- VGE – Emerging Markets
- IOO – Global 100
- IXJ – Global Healthcare
- and Bitcoin (but no more than 5% of overall portfolio)
I will be investing in Raiz through a custom portfolio from now on. There are higher costs for this portfolio type, but feel they are still cheap for what you get.
No need to buy any of these ETFs individually anymore, you can get 5,6,7,8 ETFs in the one place and automate your investments like a savings account. This is the future.
You can change this portfolio option at any time, but there may be a slight charge in doing so.
Raiz makes its money from charging you a monthly fee. In comparison to managed funds they are reasonably cheaper, but you need to have a decent balance to see that benefit.
The ongoing costs for Raiz are reasonable, if you have over $7,500 invested.
For the 7 premixed portfolios (everything but custom and Sapphire) Its $3.50 a month when under $15k, then .27% of your balance for those holding more than $15,000. Sapphire is $3.50 a month for all balances or $42 a year.
$3.50 a month is a lot if you have only chump change in your account. You really need to get to at least $7500 as quickly as possible.
For example, if you have $500 in Raiz, the fees would be $42 a year or 8.4% of your money that will go to fees.
The fees for custom portfolios are higher, with balances below $20,000 being charged $4.50 a month, and balances above $20,000 costing .275% pa.
Fees are due each month and charged from the balance in your account.
Raiz is completely transparent with its pricing and while they do infrequently increase their fees, it is still an affordable options as you do not to pay to trade (add or withdrawal money) and they keep your portfolio well balanced.
Raiz also has a rewards program. You buy something through the apps from one provider and a percentage of that purchase gets sent back to your account. I never use this or think about it but know some people who have done well utilising this.
Raiz has a super fund, which is the equivalent of the portfolios I mentioned (minus the bitcoin option). There are better super funds available as you need to factor in a thing like insurance.
- Investing automatically either by a set amount or by rounding up your purchases
- Select from a broad range of well-built portfolios
- Buy fractional shares so can invest immediately
- Rewards program
- Sustainable options
- Can invest for kids
- All in one / set and forget option
- Need little money to start with
- Costly if balance under $6k
- Easy to make changes (maybe too easy)
- Invest in predetermined portfolios
For me its these three all in the one platform:
- Fractional inverting
This means Raiz will allow you to invest with whatever money you have, will make sure your portfolio is balanced the way you prefer and reinvest any dividends for you.
I believe Raiz is the cheapest way to have the three things done automatically done for you.
The roundups feature is a bonus for me. It got me going with the product, but you need to do more than that to truly build wealth.
If you are looking to invest in an actively managed fund of growth stocks, then Spaceship is a great option
Spaceship voyager is a spin off from Spaceship Super that launched back in 2017.
Their philosophy is to look towards “where the world is going” so are big on tech companies across world. You've all heard of these names Amazon, Adobe, IBM, Google, A2 milk, AfterPay, Tesla are all prominent.
They are very transparent in how they operate which makes it easy to understand their offer, which is that it's a managed fund of selected stocks (As opposed to a group of ETFs).
Investing with Spaceship
The app is very similar to Raiz in that you add money to your account and it gets invested on your behalf.
You can set up a recurring investment or manually add. There is no round up option like Raiz so it is much simpler an interface to manage.
Spaceship's portfolio options
There are three investment options to pick from
- Spaceship Origin which tracks several companies passively (companies rarely change)
- Spaceship Universe which is actively managing and the included companies can change often (higher risk, higher return)
- Spaceship Earth which contains companies that provide a positive impact to the Earth (according to the Spaceship team)
I consider all three a “fund” in that they are a group of companies you buy into. You don't select which companies are in but put your money towards one of the three.
At the moment, you need to pick one option. You can't split investments across the funds but hear that there are plans to do so in 2021.
It’s helpful that they are transparent as they outline all the stocks included in each option on their website. You can look at the performance for each pick in a nice to digest way (good for when you research).
Note that all portfolios are 100% stocks. There is no defensive component which means it more aggressive/risky than holding a balanced portfolio that includes fixed interest and bonds as Raiz does.
Spaceship fees are lean and simple.
For your first $5000 investing is free. This makes it a great way to get started investing without worrying about cost.
The fees after $5000 are miniscule. .05% per year for the Index and .10% per year for the Universe portfolio.
This is any amount over the $5000.
If you had $10,000 in the app, you would be charged only $25 a year. This is extremely cheap.
One thing Spaceship does well over the others is educate you on investing.
It has a helpful learn section and there is a good feed on investing support and help within the app.
It can help you feel confident and supported, with the app being more than just a balance on your screen.
- Free for first $5000 invested
- Lowest cost of all investing apps
- Simple pair of portfolios to pick from
- Well diversified
- Helpful content and education on investing
- Can start with only $5
- Can be automated
- You need faith in the Spaceship investment team
- Options are actively managed rather than passively
- Portfolios are 100% stocks
Hand picked mix of stocks and companies with a tech focus.
Cheap and easy to get started and get knowledge on investing.
Very transparent in the companies included in your portfolios
CommSec Pockets Breakdown
If you feel confident with investing and want to pick specific ETFs to add to your portfolio then CommSec Pockets is for you
Connected with CommSec, Pockets is a new way to buy ETFs at a low cost via an easy to use app.
Pockets is more DIY than Raiz or Spaceship, but a still cheap and convenient. Pockets acts like a low cost broker where you can buy and sell a selected mix of ETFs.
Investing with CommSec Pockets
You need to have an existing CommBank account or CommSec account to open an account with Pockets.
Since I had neither, I opened a CommSec account so had to go through the process of doing that just so I could then setup pockets.
What's a bit confusing is that Pockets is completely seperate to CommSec standard'. This means your CommSec standard and CommSec Pockets investments show separately.
Another point of difference from Raiz or Spaceship, is that once you transfer money in it is not invested automatically (unless you setup automatic investments).
The process works like this
- Transfer money from your bank to CommSec account
- Manually select option to invest in via the app
- Complete trade
Very much like a traditional broker experience.
You can set up automatic investments, but you will need money in your account for this to happen. If you wanted to do this you would need to transfer money to your CDIA account in CommSec and pockets would take money out of this at the interval you set.
CommSec Pocket's ETF options
Pockets doesn't have pre built funds or portfolios to pick from.
You have seven ETFs that are available to buy like any other broker on the ASX. These ETFs are similar to what Raiz use to makeup their portfolios, but in this case you pick them individually. In a way you are building your own portfolio here so more control than Raiz.
- IOZ – 200 Australian companies
- IOO – 100 Global companies
- ETHI – Global sustainability leaders
- IXJ – Global Healthcare
- IEM – Emerging markets
- NDQ – Global tech companies
- SYI – High Dividend Yield Fund
Personally I like all these ETFs. In particular I own IOZ, ETHI and IEM.
The reason why IOZ was picked as opposed to VAS or A200 is the price. In Pockets you need to buy the entire stock (not a fraction of it like Raiz or Spaceship). IOZ trades around $25 which is lower than VAS at $75 or A200 at $100 or so. The concept of the app is make investing more accessible and affordable so buying into Australian stocks at $25 is that.
Note that there is no option for defensive ETFs like bonds or fixed interest which would really make this app become all in one for DIY investors. You can of course buy these at other brokers or hold money in bank accounts to add “defense”.
CommSec Pocket's Fees
Fees are simple and clear.
- $2 per trade if under $10000
- If over $1000 then it's .20%
- eg. if you invest $1500 the cost is $3
There are no ongoing fees (like the other apps) so if you were to invest semi regular then this might be a cheaper option.
Considering CommSec can charge $19.95 for the same trade, this is significantly cheaper.
While $2 is cheap, if you are buying or selling often it might not be the best option.
If you were buying fortnightly or monthly basis like I do – you might rack up costs of $52 a year if fortnightly or $24 a year if monthly.
The app is quite nice to use. It is clean and easy to manage.
The tone of voice is helpful to new investors and every step of the trading process has information to help you understand what is happening.
One thing that I love is that it does not give you daily change in your balance.
Most brokers once you sign in will show you exactly what you balance did for that day. This isn’t helpful as it grabs at your emotions telling you you’ve won or lost.
As a DIY investor, rather than a set and forget type, you can have more control on exactly what you are investing in. You can select specific ETFs based on what’s important to you.
Whether it be a region like global or Australia, which sector, or even a high dividend paying ETF.
It is a convenient step up if you already have a CommSec account. Add the app and start investing from your phone today.
If you want to build a simple investment portfolio yourself, this is a handy way to start.
You pay per trade rather than a recurring fee, so if you wanted to drop a large amount in then it is a better option as you pay once.
- While you can invest from $50, the $2 fee would make it costly for trades less than $200. I recommend $500 plus a trade if you want to keep things low cost
- To a new investor it may not be obvious what to pick from, so research of the ETFs and how to build a portfolio is recommended
- All investments are 100% stocks – no diversification across asset types
- You cannot buy fractionally so you need the exact amount to cover the cost of shares
- Build a DIY ETF portfolio through the one app.
- Select your own individual ETFs at a fraction of the cost.
- Setup recurring investments through a broker.
Summary table of investing apps
To help you work out how these apps fare side by side
Passive or actively managed fund
|Automated (if account funded) 7 ETFs to select|
|Fees||$2.5 a month under $10000|
.27% of balance over $10000
$4.50 a month for custom portfolios under $20k, .275% with balances over $20k
|$0 for first $5000.05% or |
.10% for any amount more than $10000
|$2 per trade if under $1000|
.20% if over $1000
|Other features||Round up|
Invest for Kids
|Helpful educational content||Well explained process|
Connected to Commsec accounts
|Benefits||Low cost over $10000|
Set and forget
|Low cost |
Good entry to investing in stocks
|Low cost broker trading|
Build DIY portfolio
|Considerations||Costly if low balance|
Very easy to make portfolio changes
Fixed portfolio options
|Spaceship investment team pick companies in portfolios||Need understanding of ETFs and what you are investing in |
Can be costly if trading frequently
Quick questions on investing apps
By no means is this in anyway financial advice. It is general advice and please take your own situation into account. See my posts on budgeting and saving for help in those areas so you understand what you can afford to invest.
How do I find the right investing app for me?
The best way to find out is to try them all. That’s what I do.
They are simple to set up and easy to understand.
Can I invest with little to no money?
Let me ask you this, if I gave you a dollar a day for 10 years would you take it?
That’s over $3600 dollars, which I’m probably not going to notice gone. It would have to be annoying handing over $1 every single day though.
If you do only have $1 a day spare then your best option is to save up a bit of it until you reach $50 or so and try an app out.
Watch it grow (or not!) and see how investing works.
What is the best app for investing
Raiz with a custom portfolio is my choice.
The ability to handpick ETFs, then invest on a regular basis with no brokerage fees is something I find most valuable.
Once you set things up upfront it becomes so ridiculously easy, it make anything else hard work.
Note that I think Raiz is suited for those with or 5k in their accounts looking to increase on a regular basis.
If not then CommSec Pockets or Spaceship are also great options that are very low maintenance.
What is the best investment app for beginners?
If you are brand new to investing and want to try something, I would suggest Spaceship.
Mainly due to it being free to until you have a $5000 balance.
Your money is invested in 100% stocks and the educational content included in the app is very helpful.
Are these investing apps just starter apps?
No. They are complex enough to help you build a well diversified investment portfolio that can build long term growth.
So which investing app will you choose?
Getting started is important, these apps can help you with that.
They can be a fast way to get starting investing in the market. You can also invest frequently, get confidence in what you know and do.
Realise that even if you do get started with an investing app you can move on to other investment options or tools.
If you’re not already investing, and have some money available to invest either regularly or once off then consider these investing apps.