Stockspot ETF portfolios go live

07-Apr-2014

By Krystine Lumanta

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Online exchange-traded fund (ETF) portfolio manager Stockspot has launched its five ETF model portfolios, which use a managed discretionary account (MDA)-type structure.

The five portfolios cover the main groups of risk classes and are initially available to investors who register interest for the offering, with the application process entirely online.

“We went live [last] week and are currently on-boarding investors who have subscribed for the service,” Stockspot founder Chris Brycki told financialobserver.

“We’re limiting the amount of people at the moment, but will look to open the portfolios publicly in about a month’s time; around the end of April or early May.”

The minimum investment for the portfolios was originally $10,000, but had been lowered to $2000 as Stockspot identified an opportunity to attract the younger investment market, Brycki said.

“Younger clients and younger professionals are looking to invest, but they can’t get on a platform or SMA (separately-managed account) with a small amount and definitely not with $2000,” he said.

“The initial interest we had from people who signed up to Stockspot have been younger investors, so that’s a segment we want to focus on.”

Self-managed superannuation investors and accountants also continued to show interest in the ETF model portfolios, as well as independent financial advisers who used a fee-for-service model, he said.

“Because of the nature of the product, word-of-mouth has helped with interest, but we’ll also look at getting onto social media and providing an educational piece,” he said.

“We’re also speaking to accounting groups.”

Stockspot reviewed the ETFs and asset classes every six months and would rebalance into new ETFs if necessary, but it aimed to minimise transaction costs, he said.

The offering also provided investment advice for the model portfolios, with recommendations and risks set out in the statement of advice. An annual fee is charged for the annual review of the portfolio’s suitability.

The monthly MDA service fee includes all portfolio execution, rebalancing, audit and reporting.

Stockspot does not charge entry, transaction, performance or exit fees.

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