CommSec Pocket Hands-on Review | Micro investing for beginners

CommSec Pocket Hands-on Review | Micro investing for beginners


Hi, I’m Kylie. I’m the investments editor
here at finder, and I’m going to be going
through a hands on review of CommSec Pocket.
I’m going to be taking you through the features,
we’re going to do a step by step on how to
invest in it. I’m going to be going through
the likes and dislikes. And I’m going to compare
it to one of its biggest competitors, aka
Raiz.
CommSec Pocket is a micro investing app that
lets you invest small amounts into the stock
market, or more specifically into ETFs. Why
is it creating so much buzz? Well, because
it’s been released by one of the major banks.
There are other players out there, but this
is the biggest bank in Australia, the Commonwealth
Bank. So you can invest as little as $50 in
the stock market, with a brokerage fee as
small as $2, up to amount of 1000. After that
it’s 0.2%.
That’s really cheap compared to what you normally
get when you’re investing in the stock market,
which is a minimal investment of $500. And
brokerage fees somewhere between, you know,
$10 and $30, which makes it really hard for
people just stop going out to get investing.
They don’t want to lose 500 bucks if they
just having a play around.
How does it do it? Well, it doesn’t actually
invest your money into stocks as you might
think. Instead, it invests your money into
an exchange traded fund, like I said, or an
ETF. An ETF is basically a bundle of stocks
put together into one fund, and then listed
on a stock exchange. These ETFs event bought
and sold just like ordinary stocks. But instead
of investing in one company, as you might
when you invest in shares, you’re investing
in a whole bunch of companies.
What I like about this, is that it’s really
easy to use. It’s a really sleek design. When
I first downloaded it and jumped on it a couple
of days ago, it took me about 10 minutes of
playing before I really got the hang of it.
All right, let’s go into the CommSec Pocket
app. So when I first open it, it opens my
last investment, which in this case was the
sustainability leaders ETF because I’m a millennial.
But if you scroll down here to explore more
investments, this is where you can find all
your other options. So you’ve got the Aussie
top 200 ETF, here Aussie dividends, here are
the other options. But if we go back to the
first one, the Aussie Top 200 ETF, what I
like as you can see right here exactly what
ETF it is you can see the price per unit $27
at three. And then when you click on explore,
it takes you to a few more details. So you
can see what companies the ETF is holding.
And then you can see its performance and returns
over one year, two years and all time if you
like, which is great.
So in the last year, I can say that it’s 11.64%,
which is pretty decent. And then down here,
if you’re ready to invest in this ETF, you
click here. And you can see here what the
minimal investment is going to be. So in this
case, it’s $61 CommSec Pocket says that you
can invest as little as $50 but, really a
couple of ETFs in here that let you invest
for around $50. So for this one, the minimum
is $61. And I’m going to invest $70, which
is approximately two units. And if I like
I can invest it as a regular investment, I
can set it as a regular investment. Click
Next. And then I got the option of choosing
fortnight or monthly payments. So if I choose
monthly, I can select a day. So it’s the 10th
maybe that’s the day I get paid, and continue.
It reminds you of what’s going to happen.
And then you get a final screen, showing you
the investment amount what your fees are,
and what days this money is going to be coming
out. If I click here that will set that up
as a regular investment. And voila, you’ve
invested in the stock market. So it’s as easy
as that.
There are a few micro investing apps that
are doing similar things to CommSec Pocket,
but the one that really comes to mind is Raiz.
The difference between CommSec Pocket and
Raiz is that CommSec Pocketlets you invest
into an individual ETF, Raiz actually pulls
your money into a fund of ETFs. It’s like
a fund within a fund. It’s like the inception
of the stock market. While CommSec Pocket
lets you invest in seven different ETF themes,
Raiz lets you invest in six different portfolios
made up of different ETFs.
And These range from low risk conservative
all the way to the more aggressive depending
on what types of ETFs are in the funds, so
they also invest your funds differently. Where
CommSec Pocket allows you to invest $50 at
a time into an ETF of your choice with Raiz
You can also invest a lump sum, but it also
collects spare change as you spend. That’s
spare change connected to your debit card
when you make purchases and invest that in
$5 increments into the funds. So you’re basically
investing amounts of small as $5. Fees are
also kind of different with both platforms.
So with CommSec Pocket, you’re not charged
a monthly fee that you are charged $2 brokerage
every time you place a trade. So with the
Raiz, you’re not charged a brokerage fee,
but you are charged a monthly fee of $2.50
a month. And that can add up, it really comes
down to how often you plan to use CommSec
Pocket. If you intend to make trades regularly,
say maybe twice a month, that’s $2 per trade
$4 a month, that ends up being a pretty high
brokerage fee, at the end of the year. You
might have been better off going with Raiz.
If you intend to place one big trade of say
1000 bucks a year, then CommSec Pocket definitely
has an advantage over Raiz in terms of fees.
But it really all comes down to your preference.
Do you prefer say Raiz to handle your money
and to manage your funds into a pool of ETFs?
And they can make the decisions? Or do you
prefer to kind of own your own investments,
like with CommSec Pocket? Look at it and you
can say what ETF you’re trading with? And
you get all the information that you want
to I want risky or aggressive or do I really
like this ETF? Do I really like this Aussie
stocks ETF.
What I really like is that it’s up front about
where it puts your money. It gives you these
really easy to understand themes. But it also
goes into detail about what the ETF is about
its performance over several years. And it
informs you about what your risks are. So
when you go to place a trade when you go to
invest, it reminds you that you should pay
off any debts before you invest in this ETF.
I love that it lets you contribute small amounts
frequently, you can contribute, or you can
invest twice a month, or you can invest monthly.
But at the end of the day, that’s ultimately
a really bad strategy, because your brokerage
fee goes up to a much higher amount than if
you just invested a single lump sum.
The other thing is that there’s just too few
options for my liking. So if you’re interested
in investing in more than just these ETFs
or if you’re interested in investing in stocks,
then there might be something better out there
for you. Who knows they might be adding a
few more ETFs to CommSec Pocket. We’ll have
to keep an eye out. The fees are really low
compared to others on the market. And there’s
no inactivity fee or monthly fee, which is
great for new investors. It’s a really great
way to get new investors or newbie investors
interested in the stock market. And that’s
a big green tick for me.
So that’s our review of CommSec Pocket. What
did you think? Would you use the app? And
what do you think of the ETFs that they’re
providing as well? Would you invest in them?
So I’ve written a comprehensive review on
CommSec Pocket. To read it, click on the link
below and we’ve also provided a few other
links about how you can invest in the share
market and what ETFs are all about.

11 comments

  1. Ready to start micro-investing? Here's a head-to-head comparison of CommSec Pocket vs Raiz >> https://www.finder.com.au/commsec-pocket-vs-raiz-investment-app-comparison?utm_source=youtube&utm_medium=video&utm_campaign=fv&utm_content=CommSecPocket&utm_term=comparisons

  2. Hi Kylie, great video on the new Commsec Pocket app & just wanted to ask you a question. If I was only to use the Commsec Pocket app for investing what ETFs would you recommend to in sure I have a good mix across the market?

  3. Glad I saw these CSP videos before I bought shares. Convinced me to sign up as a customer. I invested in the Sustainability Leaders option because of cheaper price and renewables support, and Aussie Dividends as a kind of "Green-Patriot" vibe to my investments.
    Decided not to go with the slightly cheaper Aus200 option, because I'd rather get the direct share investor perks of a couple of the holdings companies instead of just owning units in an ETF.
    Not overly fussed about $2 brokerage if there's no monthly or inactivity fee, but will definitely save up a bit more before making trades.
    It's a good feeling when your bank website finally has a CommSec option added to your profile.

  4. Thanks Kylie. Amazing review. For the average Jo (in my case average José since I am Latin American living in AU…). If I was to go to an investment manager and ask for their advise to where to invest 50K for argument sake; Would their advise be similar to the ETFs provided/available in Commsec Pocket? In other words would the spectrum of options they would offer me would end up being something similar to the 7 ETFs available in Commsec Pocket?

    If so, and for the average Jo, would this actually be more cost effective and easier than hiring and investment manager?

  5. Seems convenient and easy to use. I personally wouldn't be buying anything in parcels smaller than $200.00 and would even aim for $500. A $2 broker fee at $200 is 1%, and at $500 parcel size it is 0.4%. Because they are ETF investments they will only move slowly over time so you do not want to give away any more than 1% of your gains.
    Ie. Let's say you make an 8% gain over a year before brokerage, that is a 7% gain after brokerage, and accounting for 2-3% inflation leaves you with 4-5% gain. If you brokerage is any more than 1% it really starts eating into your potential gains.

  6. Great review as always, I was wondering if I decided to invest in the Aussie top 200 today and next week I also want to invest in the TechSavy, can I do that? is there any fees involved in that if I was to choose more than one platform to invest within the app? thank you so much in advance.

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