CBA launches CommSec Pocket

Looks interesting

CommSec Pocket

You can start investing with as little as $50, and gradually build a portfolio over time. Choose from 7 themed investment options and invest in something that appeals to you, like tech, sustainability leaders, or the biggest 200 companies on the Aussie market.

When you trade through the app, you’ll pay $2 each time you invest or sell up to $1,000.

Trades over $1,000 are charged at 0.20% of the trade value. For example, a $1,100 trade will cost you $2.20 ($1,100 x 0.20%)

No account keeping fees

Each ETF provider charges a management fee for providing the ETF to investors. The fee ranges from 0.09% to 0.67% of your investment per year depending on the ETF. It’s not an out-of-pocket fee. Rather, it’s deducted from the ETF’s unit price. The fee is shown when you browse the investments. The fee is charged by the ETF provider, not by CommSec.

 

Borrowed pic from Reddit

 

CommSec criticised for ETF choices

The selected ETFs are intended to represent specific themes and investment strategies, like high dividend payers, technology companies and emerging markets.

However, and in a move that has been labelled “unhelpful”, ETFs were chosen based on their unit prices, industry sources say. And only those with the lowest unit prices were selected, even when better alternatives might have been available.

Taking low unit price as the investment criteria resulted in the wholesale snubbing of several ETF providers, most notably Vanguard, the most popular and cheapest ETF provider. Vanguard lists every ETF at a $50 unit price, making its products too expensive for CommSec’s purposes, it would appear.

Vanguard’s snubbing is particularly acute given that many of the company’s plain vanilla ETFs (like VAS and VGS) are considered the best on market by some researchers and analysts.

CommSec boss Richard Burns said: “We’ve selected ETFs that best fit the themes and which were appropriate for first-time investors. For each theme, CommSec selected the ETF from one of the leading participating issuers based on several factors related to quality and cost.”

 

CommSec Pocket - Investments within reach

Thoughts? IOZ plus 0.2% brokerage and zero paperwork/fees is somewhat appealing.

 

How do you known its IOZ? Couldn't find anywhere in their site? Or is it based on MER of 0.09% as that matches with IOZ?

 

I think they actually allow you to choose from a range of ETFs.

 

If you download the App and go into 'explore' mode it tells you what all 7 ETF's are

 

• Aussie Top 200 - IOZiShares Core S&P/ASX 200 ETF
• Aussie Dividends - SYISPDR MSCI Australia High Dividend Yield Fund
• Global 100 - IOOiShares Global 100 ETF
• Emerging Markets - IEMiShares MSCI Emerging Markets ETF
• Health Wise - IXJiShares Global Healthcare ETF
• Sustainability Leaders - ETHIBetaShares Global Sustainability Leaders ETF Tech Savvy - NDQBetaShares NASDAQ 100 ETF

 

Thanks for posting DoggaPP had a look over, on the surface it looks pretty good. I think it will help a lot of people to get started in investing that didn't know how or have the confidence to do anything.
The chosen ETF's you could almost take a guess which ones they are, it would be nice if they stated what they were as part of the product disclosure which I couldn't find?

 

If you download the App and go into 'explore' mode it tells you what all 7 ETF's are

 

Pretty poor of CommSec, why can't they give a selection of ETF's even if they are over $50.
What happens when the chosen ETF's in time are more that the $50 unit price???
It seems the $50 is a big marketing ploy.

 

If you download the app and go into EXPLORE mode there is full details there.

 

They could do with a low cost international ETF IMO. IWLD?

 

Given that you can invest with as little as $50 it may be that they are targeting first time investors? If there are too many options it could make it a mind bend and first time investors might just move on and not do anything.

 

Exactly - I think there have been studies/experiments that show that if you give people too many choices, a large portion of people slip into analysis paralysis and don't do anything at all. 7 seems about right for a starter investor product.

 

At min $50 trades I really like the idea of this for my kids to get them started too.

 

As an example on the fees using $50 invested at a time for a total of $1,000 that will be 20 trades x $2.00 = $40.00 in fees.
As opposed to investing $1,000 in one go using their normal platform would be $10.00 in fees.
That is a difference of $30 for the Aussie Battler has to pay extra to make the same $1,000 investment.
Just doesn't feel right for the more vulnerable people.

 

Wouldn't a like for like comparison make more sense. If you invested $1,000 in one go using this app it would be $2, compared to $10 on a normal platform?

 

I understand that, and yes that would be great value for the $1k trade, but they are pitching the $50 for the low income earners, which is also reflective in their choice of ETF's being under the $50 unit price, hence their marketing at $50.
Just putting in another perspective of the excessive fees for the same total amount.

 

With MER's