CommSec Pocket vs Raiz vs Spaceship Voyager – Which is Better in 2020? (Review for Beginners)

CommSec Pocket vs Raiz vs Spaceship Voyager, which is better in 2020? Investing apps these days have become extremely easy to use compared to what we had 5 years ago. However you need to be careful around true cost of fees that this convenience costs you. In this post I’m going to look at the 3 most popular investing apps in Australia for beginners. I’ll start going through each one outlining all the pros and cons and things you need to be aware of when using them. Then I’ll compare them in detail and give you guys a summary for which ones best for which situations and which type of investors. Then finally I’ll also give you guys some suggestions on investing platforms to consider if you want to get into regular shares and ETFs.

Now here’s the thing though when it comes to this no joke there is a lot to keep track of and even for me it was overwhelming because there were just too many options. We have Commsec Pocket, Stake, Raze, Spaceship, Vanguard Personal Investor, SelfWealth, CMC, IG, all the Big 4, and that’s the extent of the ones that I could just remember off the top of my head. 

But anyway now that I’ve looked into all of them it’s become very apparent that all of these apps really fall into either one of two categories. They’re either super simple and good for beginner investors or much more complicated to use and targeted towards more experienced investors, so with this post I will do my best to break down and compare what I would consider the three most popular investing apps for beginner investors in Australia currently.

In fact these really aren’t just for beginners, these are great for anyone who just wants a simple autopilot solution to investing that isn’t going to rip them off like most financial advisors. Because if there’s one thing I cannot stand it’s excessively high and unnecessary fees.

Micro-investing Overview

So all of these investment apps are what people would consider to be micro-investing apps and before jumping into the comparison, really quickly I want to give you an overview of micro-investing, what it is and why it’s useful. Micro-investing allows you to invest small amounts of money to help build up a profitable fund. The premise is simple – if you frequently make small contributions over time into an investment portfolio, you have the potential to earn more than you would if you saved it up as cash in a savings account. I like it because it gets people into the habit of investing frequently in the same way you might dollar cost average into ETFs.

Now not every micro-investment platform works the same way. Some apps actually let you invest smaller amounts than is normally allowed into the stock market, also called fractional investing and others work by investing your spare change from everyday purchases when you link your bank account. Really, micro-investing is for anyone looking for a cheap and convenient way to start building an investment portfolio. 

And with that said let’s get into the post and compare CommSec Pocket vs Raiz vs Spaceship Voyager to find out which one is the best investing app for beginners. And first we’re gonna be looking at the newest app out of the 3 and that would be CommSec Pocket

CommSec Pocket Review

CommSec Pocket is run by Commonwealth bank, the largest of the big 4 banks in Australia and was launched in the middle of 2019. The basic premise of the app is that it’s basically an ultra slimmed down version of a regular stock brokerage targeted towards new investors. 

It doesn’t collect spare change but like the others, you can either set it to make regular monthly or fortnightly payments, or you can make one-off payments as you like. However it does let you directly invest into ETFs of your choice through much smaller amounts then normal brokers. When you directly invest in shares or ETFs using a standard online broker, there’s typically a minimal initial trade requirement of $500 to $1,000 and brokerage fees are usually $10 to $20.

However with CommSec Pocket you can start investing with as little as $50, and gradually build a portfolio over time. When you invest via CommSec Pocket, you’ll be buying units in an Exchange Traded Fund (ETF). ETFs are funds that trade on a stock exchange, just like shares – the difference is that an ETF represents an investment in a selection of companies and assets, while a share represents an investment in just one company. If you want more information on ETFs check out my full guide to ETF investing for beginners. 

CommSec Pocket Fees

So I’ll get the worst out of the way first, that is fees, with all investing apps or platforms they usually have fees that fall into a few different buckets. 

First is brokerage. CommSec Pocket has $2 brokerage whenever you buy or sell up to a value of $1,000 per trade, which seems pretty cheap. For any trades over $1,000 they will be charged at 0.20% of the trade value. Important to note here that no matter what value you’re trading, in terms of a percentage of trade value, 0.20% is actually the lowest you will pay. This is because even at $1,000, 0.20% is actually equal to $2. So if you do a trade at less than $1,000 you’re actually paying more than 0.20% of your trade value in brokerage, even though it’s a fixed brokerage of $2. For example if you do a trade of $500, with $2 brokerage, that’s actually 0.40% in brokerage. 

As a percentage, even 0.20% is actually pretty high, as most full featured stock brokers will all charge less than that. However and this is important, this percentage brokerage is actually not too bad because no full feature broker is going to let you start investing with $50 like CommSec Pocket and even one of the cheapest full-featured brokers has trades starting with a minimum brokerage of $9.50, which almost 5 times $2.

The next fee category is for account servicing and this is where CommSec Pocket is great, they have 0 fees for having an account. However they will charge you a late settlement fee. Cash actually is debited from your account 2 business days after your trade is done. This is when your trade settles. If there are insufficient funds when they go to debit, you’ll be charged a $10 Late Settlement Fee.

The last main fee you need to be aware of with CommSec Pocket is that since you are investing directly into underlying ETFs you will of course be charged the corresponding management fee of the ETFs you choose to purchase. But remember these ETF management fees aren’t like the type of fee where CommSec will say you owe them $5. Instead the management fee is basically integrated into the unit price of your ETF automatically, so your actual returns will be less, the ETF management fee.

CommSec Pocket Investment Options

In terms of the investment options with CommSec pocket, it’s actually the most complex out of the 3 apps, as you actually have 7 different investment options and you’re actually investing directly into ETFs. The selected ETFs are intended to represent specific themes and investment strategies, like high dividend payers, technology companies and emerging markets.

If we compare all the different ETF options, we can see they have fees ranging from 0.09% p.a to 0.67% p.a, with total holdings from around 40 to over 1000. 

CommSec Pocket Returns

In terms of the returns you could get from CommSec pocket, it really depends on which ETFs you choose to invest in. You have a lot more control over your potential returns, for example the highest returning option at 20% p.a over the last 5 years is NDQ also with a 12 dividend of 2.72%, which is no surprise when it’s full of the large tech companies. Whereas on the flipside if you had chosen to invest solely in SYI “the dividend option” you would have had only 1.51% p.a of capital growth over the last 5 years but with around 5% of dividend yields per year. Which I guess for even the worst possible option at 6.5% p.a return over the last 5 years, it’s actually not too bad and a lot better than what most new investors would get if they tried picking individual stocks.

CommSec Pocket Pros and Cons

Pros: First, one of the main benefits is that like many of these apps it is extremely easy to use. It took about 5 minutes of playing around before I knew my way around the app. Another major plus is that it doesn’t try to hide where your money is being invested. You clearly understand the fees, the returns and the risks involved. All big ticks in my book.

The $50 minimum investment is also a great incentive to get people interested in investing, and the $2 brokerage fee is about as low as it gets. And even though it gets higher over $1,000, there are definitely other brokers out there that are much worse. And you can choose whether you want to do one-off investments vs scheduled automatic monthly or fortnightly investments.

Cons: While the individual fees are low, if you choose to invest small amounts frequently you’ll actually end up paying a lot of fees, so this isn’t really a great app if you plan on investing lots of really small amounts very frequently. Really the most optimal way to use CommSec Pocket is investing in $1,000 chunks whenever you have that amount. Although the incentive to get you putting aside small amounts is a nice one, it would end up being more expensive using a different strategy.

The only other thing which is a slight annoyance is the options that CommSec has selected in their 7 categories. As other than a couple of the ETFs I probably wouldn’t consider the others as “best in their category” and you literally have no option here but to go with what CommSec has chosen. Most notably Vanguard has been left off any of the options, so something to consider here. 

Raiz Review

Raiz Invest (previously Acorns Australia) is an investing app, where their unique market offering is letting Aussies invest their money through the idea of “round-ups”. Basically you have it connected directly to your bank account and any type you make a purchase it rounds it up and invests the difference into your chosen investment option. 

• Raiz: https://app.raizinvest.com.au/invite/DWW7KA – Bonus $5 with this link

They also allow investments via the Recurring approach, where you can set daily, weekly, or monthly amounts that will allocate money to your investments on a recurring basis. And of course, you can use lump sums to boost your investments with bigger, once-off, capital amounts. 

More recently they also introduced Raiz Rewards which is essentially the same as any online cashback site like CashRewards or ShopBack. But instead of getting actual dollars back you get additional investment funds in Raiz based on a percentage of how much you spend shopping.

Raiz Fees

The round-up feature is definitely pretty unique and makes investing really easy, especially because there aren’t any transaction fees any time it takes this spare change. The way Raiz charges fees is through monthly account management fees which are in 2 tiers. For balances of under $10,000 you pay $2.50 a month and for balances $10,000 or more you pay 0.275% of your balance a year. 

Now this is where you need to be careful and understand the real cost of this fee structure. For example, if you’re a beginner investor and looking for somewhere to start with your first $1,000, well after a year you would have been charged $2.50 x 12 in fees which is $30, which is 3% p.a in fees. This is honestly pretty insane and what’s worse is that many users probably start with much less than that and rely on round ups. 

In addition you will also be passively paying the management fees of the underlying investments of the ETFs within the Raiz portfolios. 

Here are some of the ETFs that they are using in their portfolios, the fees range from 0.196% p.a to 0.418% p.a

Raiz Investment Options

Moving on to the actual investment options available in Raiz. This is one of the things I think they actually do pretty well, which is constructing pre-made diversified portfolios, similar to how the diversified ETFs from providers work, like VDHG. But obviously the allocations are different. 

So you just choose which portfolio you prefer based on your risk tolerance and Raiz will automatically purchase the underlying ETFs based on the selected portfolio allocations.

Raiz Returns

In terms of the returns they’ve been quite a mixed bag, where the aggressive portfolio has actually had the worst performance over the last 2 years. This is mainly because of the large exposure to Australian Shares which haven’t really gained much in the last 2 years, whereas bonds have been a bit more reliable in that same time period. Interesting to note that their Emerald portfolio which is their ethical investments portfolio has really outperformed all of the other investment options.

Raiz Pros and Cons

Pros: The main benefit with Raiz is really their round-up feature which is what attracts most users and since there’s no fees associated with round-ups or any of their transactions, it’s suitable for people who want to invest small amounts frequently. This combined with the extreme simplicity of the app make it a nice option for investors who are completely new to investing. It’s also great because it forces users to diversify into a set of ETFs, which gets people used to the idea of highly diversified portfolios. 

Cons: With the overwhelming simplicity, really you are paying for it through their fees, which whilst appear cheap are not really that cheap at all. Basically at an absolute minimum you are paying 0.3% p.a if your balance is under $10,000 and if it’s over you’re paying 0.275% p.a. Which is actually more expensive than if you used something like Vanguard Pocket which charges 0.2% p.a and I would even still consider that pretty expensive as well. So just know you’re paying for simplicity and ease of use through these fees. 

The other big con with Raiz is the fact that you don’t have any direct control over your underlying investments. You can only select to invest in pre-constructed portfolios, so Raiz won’t be a good option for someone who would prefer to have more control over their own portfolio. 

Spaceship Voyager Review

Now moving onto the last investing app for beginners we have Spaceship Voyager. This is run by the same people who brought you Spaceship Super and was launched in April 2018. They’re a bit different to all the other investing apps, that they are extremely focused on technology investments, which depending on your preferences can be a good or bad thing, but it does mean they’ve had great historical returns. 

And if you want a simple to use app, Spaceship Voyager is by far the simplest and most straightforward out of the 3 to use. You can select from two different investment portfolios, and set up regular top ups each week, fortnight or month. Then you let Spaceship Voyager take care of the rest.

Spaceship Voyager Fees

And in terms of fees, they’re extremely low, so low that I was really digging into their PDS to see if I could find any additional hidden fees! Basically for balances up to $5,000, there are no fees at all, no account fees, no transaction fees, not even any ETF management fees that I could find. That makes it a perfect investment tool for those of us who don’t have huge amounts of disposable income but still want a chance to invest in the market every now and then. 

For amounts over $5,000 you will pay either 0.1% p.a for the Spaceship Universe Portfolio or 0.05% p.a for the Spaceship Origin Portfolio. Which are extremely low compared to all the other options we’ve been comparing here. So big thumbs up on the fees (or lack of fees) for Spaceship here.

Spaceship Voyager Investment Options

In terms of the investment options, like I mentioned earlier, there are only 2 to choose from. Whereas most investment apps ask you to choose from amongst a number of ETFs or specific stocks, Spaceship Voyager takes something of a middle-ground approach. Specifically, the app offers two managed funds: the Spaceship Index Portfolio or the Spaceship Universe Portfolio. Here’s how they work:

• Spaceship Index Portfolio: This is a low-cost market index fund that contains 200 of Australia’s biggest companies, as well as a few major companies from around the world. 
• Spaceship Universe Portfolio: Personally managed by Spaceship’s team, this fund invests in “the 100 companies of tomorrow,” taking more risks to hopefully yield higher returns. It features companies from both Australia and around the world (over 50% of its current portfolio consists of US-based companies). 

You can’t customise the investment portfolios. The funds are unit trusts, so when you invest in the fund, your money is pooled together with other investors and invested in the investment portfolio. You acquire units in the fund and each unit represents a proportionate beneficial interest in the fund’s asset as a whole.

Spaceship Voyager Returns

The returns of Voyager have been very good since they have started, especially when you compare it with the investment options from Raiz over the same period. Their Universe portfolio has returned over 23% p.a over the last 2 years and their Origin portfolio has returned over 8% p.a in the last 2 years. Both quite respectable but of course mainly driven by their significant holdings in technology companies.

Spaceship Voyager Pros and Cons

Pros: 

• Transparent. You can easily view your portfolio holdings through your Spaceship account.
• Low fees. You will only have to pay one competitive management fee to run a portfolio.
• Simple structure. Investment portfolios are chosen for you using expert methodology.
• Low barriers to get started. There is no minimum investment amount and there are no entry fees.
• More global and sector exposure. Australia is dominated by companies in the resources and financial industries, so by investing globally, you benefit from increased industry diversification.
• Curated news. An in-house content team delivers content about companies in your portfolio, so you can learn more about your investment.
• Regular investment top-ups. You can set up a regular investment plan to automatically top up your investments each week, fortnight or month. This way, you don’t need to think about your investments and you can “set and forget”.

Cons: Most of the risks associated with Spaceship Voyager are pretty much in relation to their investments.

• Only 2 investment options, so you better like what they’re offering as you don’t have much choice.
• Market risk. This is the risk of negative returns resulting from unfavourable investment market conditions. Unit values reflect the market value of the assets in the portfolio and consequently may rise and fall in line with market variations.
• Country risk. There is a risk that a country where assets are located could become politically or economically unstable. This risk is generally higher in countries classified as emerging markets.
• Foreign currency risk. Investing in global companies exposes the portfolio to foreign exchange rate movements. Spaceship does not use currency hedging to manage the impact of this risk. When foreign currencies fall in value relative to the Australian dollar, this can have an adverse impact on investment returns.
• Inflation risk. Changes in inflation may impact the value of your investment as inflation reduces the purchasing power of assets or income over time.
• Interest rate risk. This is the risk of investment losses resulting from an increase in interest rates.
• Liquidity risk. This is the risk that you may not be able to convert your investments into cash on a timely basis with little or no loss of capital. During extreme market volatility, Spaceship Capital may choose to suspend redemptions and defer payments for a period of time to protect investors.

Comparison of CommSec Pocket vs Raiz vs Spaceship Voyager

Summary of CommSec Pocket vs Raiz vs Spaceship Voyager

In summary when looking at CommSec Pocket vs Raiz vs Spaceship Voyager, if you’re someone who likes a lot of control with their investments but are still just starting out and don’t have a huge amount to invest yet, then CommSec Pocket will be the best option for you.

If you are someone who typically finds it hard to save, well the round-ups feature of Raiz combined with their no transaction fees will be a suitable option for you, as they are great for people who want to do frequent small investments over time.

Finally if you just want the cheapest fees and the simplest to use platform, well Spaceship Voyager is going to be the best option for you, as long as you like investing in technology stocks as well.

However in saying that I think for people new to investing looking to get started I actually think they’re all pretty good options, and this is why.

Sign-up using these links:

• CommSec Pocket: https://www.commbank.com.au/investing/commsec-pocket.html
• Raiz: https://app.raizinvest.com.au/invite/DWW7KA – Bonus $5 with this link

Benefits of micro-investing

There are many potential benefits of micro-investing, including:

It’s easy

• It’s quick and simple to set up an account with a micro-investing platform and link it to your bank accounts. It then acts like a sort of electronic piggy bank for your spare change.

It’s convenient

• Micro-investing requires minimal input on your part. Because the entire process is automated, you can start building an investment balance without even realising it.

You can start a savings habit

• By getting into micro-investing from a young age, you can create positive saving habits that will last a lifetime. It’s a very effective way for Australians who have never invested their money before to make a start.

Minimal investment required

• You don’t need a huge bank balance to take advantage of a micro-investing platform. You can start by investing your small change and then watch your balance grow.

Choose from diversified portfolios

• The money in your investment fund can be balanced in a diversified ETF portfolio based on your financial goals and your appetite for risk. You don’t need to be an investment expert or have specialised financial knowledge.

Next steps

Finally if you’re looking to progress from micro-investing and you’ve read all you need to know about CommSec Pocket vs Raiz vs Spaceship Voyager, and you’d rather dive right into the deep end, have a look at investment platforms like:

• Vanguard Personal Investor check out my full in-depth review, on Vanguard Personal Investor Australia.
• SelfWealth the current cheapest full-featured Australian Shares broker for the ASX, sign up with my referral link for 5 free trades.
• Stake one of the easiest ways to start buying US shares with $0 brokerage, use my referral link for 1 free stock, valued up to $100.

These are all full featured stock trading platforms, which all have simple to use apps suitable for both new and seasoned investors.

So with that said you guys thank you so much for reading my post about CommSec Pocket vs Raiz vs Spaceship Voyager, I really appreciate it. Also feel free to add me on Twitter or Instagram and then finally leave a comment if you have any questions or want me to cover something in particular, thank you again for reading and until next time.