Archive - Raiz Invest

September 2020
Want to save money? Here are 5 easy tips
Saving can be tough in this current environment, but that doesn’t mean you should give up on building a financial nest egg for you and your loved ones. While growing your savings undoubtedly takes a degree of effort, there are some simple ways to start on the path to financial security.  

Get on top of your budget

There’s little chance you’ll be able to save much money if you’re not keeping good track of your cash. This is why it’s important to create a budget -- and stick to it. When it comes getting your budget started, kick things off by taking a look at your income and expenses.  Once you’ve established your income -- payments like your salary and other types of capital gains -- figure out what you’re spending your money on. This includes fixed costs like rent and food as well as discretionary spend such as entertainment and non-essential shopping.  

Cut your expenses where you can

There’s no point in just having a firm grasp on where you’re spending your money - that’s only half the battle. The key is cutting spending so you can allocate more money to your savings. Although depending on your situation during the current economic environment, it may be a much harder time than usual to do this. Some common strategies include seeking out better deals on your regular payments -- things like bank and utility bills.  It could also pay off to switch to cheaper brands of clothing and food, or cut down on under-utilised subscription services.  

Consider a savings account

Once you’re on top of your household budget, a good way to take the next step on your savings journey is to open a savings account that offers high interest. You don’t need much money to open a savings account and you get to earn a small portion of interest on what you deposit. It’s worthwhile comparing savings accounts, allowing you to find the most competitive interest rates.  

What about investing?

While a savings account is a fantastic way to get the ball rolling on achieving your financial goals, you may also want to consider investing if it makes sense for you. The Raiz Philosophy is to invest small amounts regularly, even in falling markets as this can help you to ride out the downturns in the market and is one of the keys to having a healthier balance over the long run. This principle is known as
Dollar Cost Averaging. Compounding happens when you let the returns on an investment build up so that you are earning return on your return. Given enough time to work its magic, it provides the potential to reach a stage in your life where your money is working hard enough to provide a substantial part of your income.  

Build an emergency fund

Building your savings should be about achieving your financial goals, but don’t forget to also prepare for when times get tough – the current coronavirus pandemic for example. This is where an emergency fund can be super helpful. Depending on your particular circumstances, you may need to build a sizeable emergency fund, or one that just needs to get you through a few weeks without regular income. Whatever you may need money for down the track, it makes sense to prepare for a financial shock in order to soften the unexpected bumps along the road.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.
How Raiz calculates your investment performance
We often get asked “what is the performance or return of my Raiz investment”. Calculating how an investment is performing is typically done using one of two standard methods that you may have heard of before. One method is called Return on Investment (ROI) and the other is called the Internal Rate of Return (IRR).  

Return on Investment (ROI)

First, let’s look at ROI, which is the most basic way to measure the performance of an investment. Now typically ROI is used for simple investments where you make a single investment on a particular date and hold that investment for a period. To calculate ROI you would divide the change in the value of your investment for the period by the original cost of your investment, and the result is a percentage. The higher the percentage, the harder your investment is working for you. So, if you invested $100 and then 1 year later your investment was worth $110, we would calculate ROI as: $$ {$110-$100 \over $100}\times 100=10\%$$ The limitation of ROI is that it cannot account for many small investments made at different times. Each individual investment would have its own unique ROI and there is no easy way to combine them into a single percentage as even trying to take an ‘average’ would result in something quite meaningless. When you consider your Raiz account, because of normal market fluctuations, if you were to make a $10 investment when you first opened your account, it would make a different return than an investment of $10 made a year later. Let’s assume you have had your account open for two years. If the market fell 10% in the first year, and then goes back up by 20% in the second year, the investments made midway through the period would have a greater return than the ones made at the start. So attempting to use ROI in micro-investing situations such as your Raiz account simply does not work, as the investment is too complex, and we have not even begun to consider any withdrawals that you may have made during the period.  

So what about calculating performance using IRR?

Well, IRR can be used to calculate the estimated annual return of an investment that has
many different deposits and withdrawals made over time. It is the return that makes all your cashflows, in and out, equal to your current balance. Using our example above, where the market goes down 10% in the first year and then back up 20% in the second year, if we had made a $100 deposit in each of the two years, our account balance would grow to be $228. On a simple return this is roughly 6.8% p.a. However, the IRR to make the two $100 investments made at different times, equal to $228 after 2 years, is 9% p.a. This gives us a more representative return that considers multiple deposits over differing market conditions. If you’d like to see the maths, it is calculated as: $$ $100 \times 1.09^2 + $100 \times 1.09 = $228 $$  

The downside of IRR

IRR is time consuming to calculate as it must be done through trial-and-error. It also needs to take into account every deposit and withdrawal made on an investment account since it was first opened. As you can imagine, we would need to do this for hundreds of thousands of customer accounts, and this would take an enormous amount of computational power to calculate. Even if it only took only 100 milliseconds for a computer to retrieve the data and calculate the IRR of one customer account, when we multiply that by 225,000 customer accounts, it would take 22,500 seconds. That’s a mind blowing 6 hours and 15 minutes of processing time to compute the IRR for the entire Raiz customer base. This means at the moment it is simply not practical for Raiz to use IRR in real-time while maintaining a good user experience.  

Our Solution

Our solution to this problem is that we use a modified calculation. Our modified calculation gives an approximation of the figure which could be achieved by doing the standard IRR. We do this by using your average balance over the period to calculate your returns. When the average balance is calculated, it takes into account all deposits and withdrawals, and by using this modified method, the calculation becomes simpler and quicker to run than an IRR calculation.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.
How to bulletproof your finances in a recession
Australia has officially entered recession for the first time in nearly 30 years, and with the continued presence of COVID-19, we may be in for a protracted period of economic fallout. Despite the drop in economic activity, as a country we are still doing better than many other world economies – for the moment. That said, people are understandably concerned about the impact this recession will have on their everyday lives, as recessions typically bring a reduction in employment, reduced pay rises, and stricter lending requirements for loans and mortgages. As individuals a recession is something that is beyond our control, but what we can control is how we prepare for it. Here are some top tips to help recession proof your finances.  

Update your CV

During a recession not all businesses are viable, and others need to cut their costs to survive. We are already seeing significant increases to the unemployment rate, and there could be more pain over the coming months as schemes such as JobSeeker and JobKeeper come to an end. Therefore, it’s a good time to consider updating your CV and social media profiles such as LinkedIn and sign up to job websites just to get a feel for the current market conditions. In the event you find yourself seeking alternative employment, you will be ready to immediately apply for opportunities as soon as they are posted, and with an increasing number of people chasing limited vacancies, you want to make sure you don’t miss out on the perfect role for you.  

Go frugal and create a monthly budget

Budgeting experts typically recommend that no more that 30% of your income (after taxes) is spent on discretionary items. So, knowing how much and where you spend it, can help you identify problems. Paying rent, groceries, gas, electric, legally required insurances etc are all essential expenses. Socialising, Netflix, and anything you would potentially consider to be a lifestyle expense is discretionary. The goal is to increase your available ‘free’ cash by getting your expenses under control. Start by writing down all the money you expect to receive over the course of a month. With this money, allocate a reasonable amount to food shopping, and then work out how much all the other essential household bills add up to. Split that into four, so you have a weekly budget to work with. Any left over money should firstly be prioritised to paying down debt (such as your credit card), then building up the savings in your emergency fund. Many of us find that once we have done this, there is nothing left to allocate towards lifestyle/discretionary spending, so then we need to look carefully at each essential expense and find ways of reducing what it costs. For example, buying from multiple supermarkets to take advantage of deals and get the weekly grocery bill down, or switching energy suppliers to get a better rate on our bills. By writing down your financial budget, you have something you can look at and check you are following it, and also more easily highlight areas where you may be being financially stretched beyond your means. The Raiz App has an in-built
My Finance tool to help you with this. My Finance is a free to use feature within the Raiz App. It provides you personalised insights and notifications on how you are spending.  

Slash your bills

A good way to generate extra cash flow is to spend some time checking that you are paying the cheapest price for everything that you purchase. Check to see where you can save money on ‘energy contracts’. By using comparison services like Raiz Energy, you could instantly save by locking in a cheaper supply agreement while also earning a bonus reward into your investment account or your emergency fund savings goal. Look at all your monthly subscriptions (such as gym access, internet access, mobile phone, Netflix etc). Make sure they have not increased their fees without you knowing, and that you are still getting value out of the service. In some cases, you may be able to switch to a lower cost plan with the same provider, or an alternative provider may offer a better deal. Check the renewal date on your car, health, and household insurance, and see if it is possible to get a better deal with an alternative insurer. People who remain loyal to an insurer year after year often miss out on hundreds of dollars’ worth in savings as premiums creep upwards. If you are buying online, look not only for bargains, but also make your purchases through Raiz Rewards, so you are earning a bonus ‘cashback’. With over 250 partners, you’re sure to find many brands and retailers you are already shopping with.  

Pay off your debts

Put together a schedule of all the debts you owe, such as credit cards, car loans, mortgages etc and list them in order of highest interest rate to lowest. Your aim is to pay off the debt with the highest rate first before moving to the next debt. Try to pay off as much as you can afford now, and it may help you if times get financially tougher later. Alternatively, if you are unable to pay off your debts quicker, you may want to look at refinancing or consolidating your debts. Interest rates are currently at an all-time low, and there has never been a better time to move lender for a cheaper interest rate - there are deals to be had for those willing to make the move. As always, if you are struggling to make payments talk to your lender and ask how they can help. Many lenders can arrange negotiated repayment plans, or repayment ‘holidays’, especially if you have a good credit history of making regular payments in the past. It makes commercial sense for most lenders to work with their customers to help them repay the debt rather than having a customer default on a loan.  

Have your emergency fund ready

You should always be financially prepared for the unknown. To best protect yourself during a recession, build up an emergency fund that can get you out of trouble should an unexpected expense or loss of income occur. The general rule of thumb is to have between six to nine months worth of expenses saved up. This would normally be a saving or investment account which has instant access, and you can use the Savings Goal feature within Raiz to help you grow your own emergency fund. The aim is to build up this fund as early as possible but be strict with yourself and make sure you leave it untouched unless it’s to pay for a real emergency. This takes discipline, but you will be thankful it is there if the time comes and you need to use it.  

Play the long game on your investments

Investing is best viewed as a medium to long term strategy. Ultimately there are only two points in the investment cycle which matter, the price you paid to buy the investment and the price you get when you sell it. Everything else is the roller coaster ride that is the stock market. So, during a recession, buckle in and enjoy the ride, because it may be a wild time! Markets may see significant drops, but by making regular contributions to your investments you will reap the benefits of dollar cost averaging, and benefit from the opportunity of lower market prices when they occur. You can set this up on your Raiz account by creating a recurring investment within the Raiz App. Always keep in mind that you only really lose money if you sell your investment for less than you bought it for. While markets may go down, historically they have always recovered. It is also true to say that recessions do not last forever. The good news is that at some point in the future we are probably going to see market confidence return, it’s just that unfortunately no one can predict exactly when that will happen!  

The bottom line

Understanding your finances and having a plan of action puts you back in control in uncertain times. Your check list for success is:
  • Don’t Panic, but remember you should always carry a towel
  • Take stock of your finances, and review your current situation
  • Plan for the worst, while staying positive and hoping for the best
  • Top up your emergency fund now to avoid relying on credit in the future
  • Establish a budget and stick to it
  • Investments are like pets, they are for life, not just for Christmas
 
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.
US tech shares slide whilst consumer prices lift
14-09-20 George Lucas, Raiz Group CEO Last week saw a pullback in the US equities market, led by a major sell-off in the US tech sector. The pullback wasn’t restricted to the US, with similar slides in other stock indices overseas and in European markets. However, the pull back in Europe has not be on the same scale as the US. Also, this is the first time the European market has outperformed the US in common-currency terms since a period between mid-May and 8 June. In that period, Europe’s out-performance was largely due to a big rise in the euro against the US dollar. That has not been the case this time around.  

US consumer prices rise on virus fears

US consumer prices lifted solidly in August, up 0.4 per cent month-on-month. The large increase in core CPI was principally due to a 5.4 per cent surge in used motor vehicle prices which, unusually for this very early stage of the recovery, reflects problems with dwindling inventory. Indeed, the cost of used cars and trucks jumped by the most in more than 51 years, with Americans shunning public transportation because of COVID-19 fears probably also a factor behind the data. Looking closer at US inflation, many commentators are happy as the US approaches its inflation target.  However, I see it as something to be wary of as it’s not expected to see such large increases in inflation at this stage of the economic recovery. That’s because with such a large amount of money being printed in the US, there is always the risk that it has gone too far and inflation rises substantially due to structural supply issues around goods and services caused by COVID-19 restrictions. Indeed, these structural supply chain issues already have caused the latest iPhone release to be delayed. On the outlook for US monetary policy, investors will turn their attention this week to the Federal Open Market Committee’s (FOMC) September meeting, but are likely to disappointed as the Fed will probably unveil only limited changes to its policy statement and forecasts.  

China: credit growth jumps in boost for recovery

In China, credit growth increased in August, lifting to its highest rate in two-and-a-half years as growth in direct financing and shadow credit picked up amid bank lending. The increase is due to a surge in government bond issuance and other easing policies that continues to take effect and that should boost China GDP growth in 3Q and 4Q. On that point, expect continued ramp-up in lending in the coming months. A further acceleration in government bond issuance is scheduled for the rest of the year, while stronger investment demand due to ongoing economic recovery should prop up issuance of corporate bonds and equity.  

Gradual recovery underway in UK

In the UK, the strong 6.6 per cent rise in GDP for July suggests that the record-breaking negative growth rate of GDP in Q2 will be followed by a record positive growth rate in Q3. Keeping things in perspective, July is likely to be the last of the big monthly step-ups in UK economic activity as COVID-19 restrictions ease, with a full recovery unlikely to be achieved until early 2022. Meanwhile, the continuation of Brexit talks in the UK and the possible vote on the government’s Internal Market Bill in Parliament could further weaken the pound this week.  

Central bank policy looms in week ahead

In Indonesia, Bank Indonesia (BI) meets this week, but I don’t expect the central bank to change policy amid intensifying currency depreciation due to debt monetisation worries. I also can’t see BI raising interest rates as Jakarta goes back into lockdown In Malaysia, in case you missed it, Bank Negara Malaysia (BNM) left its policy rate at 1.75 per cent last week, but with the nation’s economy weak I doubt this marks the end of the central bank’s easing cycle. But the pressure is off as the Malaysian Ringgit (MYR) has weakened substantially. Finally, we have seen a bit of strength in the US dollar as “risk off” seems to be the theme of markets over the last two weeks. However, I expect this will not last long and the USD will soon be back under some renewed pressure in general. Such an outcome could benefit riskier Malaysian Ringgit (MYR) and Indonesian Rupiah (IDR) currencies, but don’t hold your breath. US real yields are going to continue to fall and that is not good for MYR & IDR as the real yields fall in the US will benefit currencies more like AUD and Euro.  
  Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person's particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website. Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products. General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.
Investing Basics: Types of Investments
In everyday life, we often refer to investing as putting time or effort into something that will provide a long-term benefit, such as an education. When we talk about investing from a financial perspective, we’re more concerned with investing money, with the expectation of generating an income or profit with a long-term benefit for you financially. Investing’s long-term benefits may place you on the path to the lifestyle you want to live. For most investors, growing their investments and savings isn’t about getting rich quick or buying private jets, it’s about creating financial security and freedom to choose the life they want to lead - to put them in control. Let's take a look at some of the most common types of investments people put their money into.  

Shares

One of the most well-known types of investments are shares. Put simply, when you buy a share you are acquiring a small piece of ownership in a company. You may have also heard shares referred to as stocks, and although they are often used interchangeably, there is a small difference. When a company sells a portion of its ownership, it does so by issuing stock. The stock in a company is then divided into shares. As you own part of the company, you are also entitled to part of the earnings of that company.  Profitable companies may therefore pay
dividends, which is a way of distributing the earnings of the company to its shareholders. In Australia companies pay a large proportion of their earnings out in dividends compared to many other countries in the world. You can purchase shares through a share market, which is essentially one big auction house, where buyers and sellers list their respective buying and selling price, and when agreed upon pass on ownership of shares. In Australia the main exchange is the Australian Securities Exchange (ASX). Just to confuse you, the share market can be referred to as both the stock market and stock exchange, but this is just finance people enjoying having different names for the same thing.  

ETFs

ETF stands for an Exchange Traded Fund. An ETF is essentially just a basket of different shares that are pooled together into a single financial product that can be traded on the share market. ETFs are especially important for Raiz members as they are the main investments in our portfolios. ETFs often track an underlying well-known index. An index is a hypothetical portfolio of shares that tracks a segment of the financial market. The S&P/ASX 200, for example, tracks the performance of the 200 biggest company stocks in Australia. So, an ETF that tracks the ASX 200 index will comprise the shares from those 200 companies and change in value in line with the index. One of the main advantages of ETFs is that for a low cost they give you exposure to many different companies, diversifying your investment. ETFs aren't limited to tracking just the share market, and are available for many different types of assets, such as bonds, cash and commodities.  

Property

Investing in real estate has a unique position in the investment field. Unlike the above investments, property is a physical, tangible object that you can see and touch. Demand and supply for property is the main driver of real estate prices. There are many factors which influence the demand for property, but location is the main one. The main factor that affects the supply of property is unemployment. Property investing is well understood by many. In Australia and many parts of the world there is a belief that property prices always rise. However, this may not be true and because there is no exchange where properties trade daily, their price is less transparent. The downfall of property is the high entry and exit costs, and having  to pay interest if you need a loan to acquire the property. The other downfall is the cost of maintaining the property. These costs create the possibility to lose money if your interest payments and maintenance costs are less than the income you earn from the rent and capital appreciation of the property. Property is also a highly illiquid asset, which means it’s difficult to convert the assets you own into cash.  

Cash

Cash is what you keep in your bank account. It represents the low risk, low reward option of the investment world. In Australia, many cash deposits are guaranteed by the government, so they are very low risk. When we talk about cash as investments, we focus on high interest savings accounts and term deposits. Term deposits are bank accounts where you cannot touch your cash for a specified number of months and usually receive a higher rate of interest. The advantage of keeping money in cash is that it provides certainty (as long as the Australia government can pay) that you will get your money back when you need it, however this comes at the cost of low returns, which can be very low. Currently we are living in a record low interest rate environment, with most of the interest earned from cash investments being wiped out by the increasing cost of living.  

Bonds

Put simply, a bond is a loan. When a company or government needs funds, they may issue bonds to borrow money. When you buy a corporate bond, you are lending money to that company for a set amount of time in return for regular interest payments. As well as the interest payments, your initial investment will be repaid to you on a pre-determined date, known as the maturity date. Think of it like taking out a loan from the bank, except the roles are flipped, with you paying the principal upfront and then receiving the interest payments. Bonds, like cash, are considered a more defensive investment since they provide you with a predictable income. Because there is more risk involved, bonds typically pay a higher interest rate than cash investments like term deposits. For example, if the company or government that issues the bond runs out of money and defaults on the loan, it's possible you won't get back the full amount you invested. Lending money to governments is safer than lending money to a company, and as such government bonds generally pay lower interest than corporate bonds. Some bonds can be traded on the share market, and there are even ETFs that track bond markets. Raiz uses two bond ETFs in our portfolios, IAF (Australian Government Bonds) and RCB (Australian Corporate Bonds).  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.
Understanding Risk
Life is inherently risky. Every decision you make, whether it’s getting into a car, going on a holiday, or moving house, carries some form of risk that things will not go as expected. But to dodge risk by locking yourself in a cocoon is to pay the highest price: you miss everything. In financial terms, we define risk as the chance that an investments actual gains will differ from its expected return - in other words, it’s the possibility you’ll end up losing money or making less than you hoped. In general for investing, the higher the expected return, the higher the risk. This is known as the risk-return trade-off.  There’s no such thing as a foolproof, high return investment, so you should always beware that a high return will also carry a high risk. Whilst risk is inherent to investing, there are strategies that can be used to manage it.  

Volatility

Volatility is used to measure how much the price of an investment varies. It's concerned with how fast an asset moves in value and is a measure of the risk of that asset. The higher the volatility the higher the risk. An example of a highly volatile asset is bitcoin, since its value often fluctuates up and down quite quickly.  

Diversification

We’ve all heard the phrase ‘don’t put all your eggs in one basket’. If we change this to ‘don’t put all your money in one investment’ we’d be talking about diversification. Every asset that you buy comes with the
market risk that it’s value could drop. There is always an unexpected event. So, by spreading the money in your investment portfolio across different assets, it can reduce the risk that all of them will fall in value at the same time. In colloquial terms, this would be referred to as ‘hedging your bets’. ETFs are an excellent and inexpensive way to achieve diversification because they give you exposure to stocks from many different companies. The Raiz portfolios are built from a selection of 9 ETFs, offering even more diversification as each ETF tracks a different set of assets, whether it’s domestic & international share markets, government & corporate bonds, or cash.  

Opportunity Cost

This is the risk that you make an investment decision, and then after the fact realise your money could have performed better elsewhere. This is a risk people often forget about when they keep their money in highly liquid, low returning cash investments. Yes, this eliminates some risks, but it can carry a heavy opportunity cost.  

Risk Tolerance

Your risk tolerance is how comfortable you are with taking risk. It describes how much risk you are willing to take on to achieve your investment goals. Understanding your risk tolerance is important, as if you take on too much risk, and are unable to stomach large swings in the value of your investment, you may panic from the stress and sell at an inopportune time.  

Investment Horizons (Timeframes)

An investment horizon, or timeframe, refers to the total length of time that you expect to hold an investment. Investment horizons can range from short-term, just a few days or months long, too much longer-term, potentially spanning years to decades. Superannuation is a common example of a long-term investment horizon. When investors have a longer investment horizon, they may be able to take on more risk, since the market has many years to recover in the event of a pullback. That’s why you will often hear the phrasing that in the long term, the market tends to go up. On the other hand, a shorter time horizon opens you up to the possibility that you may have to sell your investment during a market downturn, in effect forcing you to sell low. Therefore, investments with short time horizons should generally carry less risk to reduce the likelihood of the investment decreasing in value in the short term.  For example, a 2 month investment horizon should probably be in cash. Investment Horizon can be more important than Risk Tolerance when deciding which investments you should choose. Especially when the investment Horizon is very short or very long. The Raiz portfolios are built to match certain risk profiles, which range from conservative to aggressive. For an investment horizon that is short term (less than three years), a conservative portfolio option is probably the best choice to achieve your goal. See our blog on Which Raiz Portfolio Could Be Right For Me for more information on investment horizons and portfolio choice.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.
Double Referrals in September!
For the entire month of September we are doubling the referral bonus you and your friends can earn! That’s $10 for you and $10 for your friend.  As a Raiz investor, you have already begun your investment journey. You have experienced how simply putting aside the spare change from your purchases, or investing a little extra each week, fortnight or month can bring you a step closer to financial freedom. Why not share this experience with your family and friends?  

Here’s how simple it is:

Step 1: Tap on the menu icon in the top left of the Welcome screen and select ‘Invite your friends’. Step 2: Share with your contacts or post your referral link to your favourite social media channels! If you access your Raiz account via web browser instead of the app, you will find the same options available in the menu on the left-hand side of the screen!  

What happens after I refer my friends?

Your friends will receive your unique referral link which will look something like this: http://app.raizinvest.com.au/invite/ABCDEF Your friends should use that unique referral link to begin creating their Raiz account.  

When will my friend and I receive our referral bonus?

For you and your friend to qualify for the referral bonus, your friend must not have previously signed up to Raiz. Once they have determined if Raiz is suitable for them they should create their account, and once it has been approved, your friend must activate it by making an initial investment of $5 or more. But it is important that they read the product disclose statement (PDS), especially the risk and fee section and determine if Raiz is a suitable product for them. Once they have made their first successful investment and it is showing in their Raiz balance, you will both receive the $5 ($10 in September) referral bonus automatically into your Raiz accounts within 5 business days.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.
Parliamentary inquiry rejects calls to ban screen-scraping
We welcomed the findings of a parliamentary committee that has rejected calls for an outright ban on screen-scraping, acknowledging that it found no evidence of consumer harm due to this practice. Screen-scraping is the name (albeit a poor one) given to the technology that powers our Round-Ups feature, allowing us to see banking transactions and find the virtual spare change with your consent. The Select Committee on Financial Technology and Regulatory Technology, which handed down its report into the  FinTech and RegTech sectors yesterday, said: “it is pertinent that ASIC has found no evidence of consumer harm as a result of these practices (screen-scraping).” “(We) consider that an outright ban on screen scraping is not prudent at the present time, and that, in many cases, these practices are enabling companies to innovate and provide competition in the financial services sector.” This recommendation by the committee is an important step forward in allowing genuine competition in the Australian financial services sector. Although the committee acknowledged that it would take time for the Open Banking regime to provide a level of data quality and ubiquity that is available using digital data capture services, it also rightly pointed out that the correct place to address the issues associated with screen-scaping is within the ePayment’s code. Why is screen-scraping to be addressed in the ePayment code? Good question. It’s because screen-scraping has the potential to significantly reduce fraud associated with online payments, a type of fraud which has also increased significantly since the onset of the COVID-19 pandemic and restrictions. ASIC is in the process of reviewing the ePayment code to update it for the 21st century. In our submission to the committee early this year, we strongly argued that the political and regulatory environment continued to favour a “Big Four” bank policy, a reality confirmed by the passing of the Consumer Data Right (CDR) legislation. The playing field remains significantly skewed in favour of the ‘Big Four’ and the Apples and Googles of this world. This position is only re-enforced by the CDR legislation. A legislation that further empowers the “surveillance capitalism” that comes with large scale business models and is practiced by incumbent institutions in Australia. The reality is that this bias is still the regulatory norm for our industry. But hopefully this report will be another catalyst for change that will encourage Australian FinTech innovation that puts consumers first.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.
August 2020
Global equities strong as tech shares power on
Raiz Market Insights 31-08-20 George Lucas, Raiz Group CEO Last week saw global equities hit record highs, ending a bear market that at one point had wiped a third of the value, or roughly $22 trillion, off publicly traded companies around the world, according to the FTSE All World index, which covers around 4000 companies in 47 countries. The advance has been led by tech giants Apple, Microsoft and Amazon -- the largest components of both the S&P 500 and FTSE All World indices -- which are each up 40 per cent or more this year. Notably, the gains by the indices, weighted by their members’ market capitalisations, have not been evenly distributed. For instance, only a third of the nearly 4,000 companies in the FTSE All World index have matched or eclipsed its 3.1 per cent advance this year, according to Bloomberg data. By contrast, about 47 per cent of companies remain down 10 per cent or more in 2020. This divergence reflects an improving outlook for large corporations and their profitability.  

US Federal Reserve flags new inflation era

In the US, Federal Reserve chairman Jerome Powell in a speech indicated that the central bank would adopt an average inflation target, pointing to the prospect of even looser monetary policy and lower interest rates for longer. The new approach is known as “average inflation targeting.” Chairman Powell’s overall message and the shift towards targeting average inflation clearly points towards further policy accommodation, but it was less clear as to what form that may take.  

US dollar slides amid COVID-19 fallout

Powell’s speech prompted a fall in the US dollar, with the greenback sliding by about 1 per cent against other major currencies after his speech. However, while the US dollar slipped, the 10-year US Treasury yield jumped by about 10 basis points (and longer-term yields by even more). This combination of higher yields and a weaker dollar is a bit puzzling as usually a rise in US yields leads to a stronger US dollar. But it’s no more puzzling than equities powering ahead during the worst recession in our lifetime with no end in sight. At home, the Australian dollar rallied above 73 US cents and our view is that the local unit will reach 80 US cents by December.  

Negative real yields puzzle in US

Meanwhile, an issue that puzzles is that real yields in the US are negative, which usually discourages savings and encourages spending, yet money continues to flow into equity markets as negative interest rates make equity investing, especially with leverage, more attractive. By contrast, the trend is acting as expected in many other major economies like Australia, where real interest rates are positive, and we are seeing bank deposits growth. Part of the answer to this conundrum could be that the US is not seeing the wealth transfer needed to support the economy and increase spending. Rather, wealth seems to be flowing into equities markets and making the wealthier more wealthy.  
Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person's particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website. Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products. General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.
Share Stories, Invite Friends, Get Cash!
As a Raiz investor, you have already begun your investment journey. You have experienced how simply putting aside the spare change from your purchases, or investing a little extra each week, fortnight or month can bring you a step closer to financial freedom. Well now there is a way you can share this experience with your family and friends. Over the years, many happy investors have joined Raiz through word of mouth. When you join Raiz, you get your own referral link, which you can use to invite other people you know to sign up. For each friend that you refer who starts investing with Raiz, we’ll pay you a referral bonus of $5 ($10 in September). How good is that? Plus, your friend also gets a $5 ($10 in September) bonus, and as you know, every little bit helps, especially when first getting started. So, by referring your friends to Raiz, everybody wins! If you think you have a friend or family member who might like to begin their own investment journey with the Raiz App, then we have made the process even easier, as you can now refer your friends via your favourite social media channel as well as by email or text direct from within the app! There’s no limit to the number of friends you can refer to Raiz, meaning there is no limit on the number of referral bonuses you can earn!  

Here’s how simple it is:

Step 1: Make sure you have the latest version of the Raiz app. Tap on the menu icon in the top left of the Welcome screen and select ‘Invite your friends’ to start referring! Step 2: Share with your contacts or post your referral link to your favourite social media channels! If you access your Raiz account via web browser instead of the app, you will find the same options available in the menu on the left-hand side of the screen!  

What happens after I refer my friends?

Your friends will receive your unique referral link which will look something like this: http://app.raizinvest.com.au/invite/ABCDEF Your friends should use that unique referral link to begin creating their Raiz account.  

When will my friend and I receive our referral bonus?

For you and your friend to qualify for the referral bonus, your friend must not have previously signed up to Raiz. Once they have determined if Raiz is suitable for them they should created their account, and once it has been approved, your friend must activate it by making an initial investment of $5 or more. But it is important that they read the product disclose statement (PDS), especially the risk and fee section and determine if Raiz is a suitable product for them. Once they have made their first successful investment and it is showing in their Raiz balance, you will both receive the $5 ($10 in September) referral bonus automatically into your Raiz accounts within 5 business days.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.
6 ways you can start using your Raiz x bundll digital card
Thanks to Raiz’s partnership with bundll, eligible Raiz users with a Raiz x bundll digital card can start bundling up all of their purchases right now into a single bill that’s paid later, ideal for smart shoppers who want control over how and when they pay for everyday purchases. Here are a few quick and easy ways to start using your Raiz x bundll digital card.  

1. Shop anywhere with two weeks to pay

A Raiz x bundll digital card gives you the convenience of shopping anywhere and anytime and being able to bundle up your weekly purchases, with two weeks to repay the amount,  interest free. That means with a digital Raiz  bundll digital card you don’t have to wait to buy the items you need right now as each purchase made over the last seven days is aggregated into one place. You then get up to a fortnight to pay that bundle off.  

2. Get on top of your weekly budget

A Raiz x bundll digital card also helps you be the master of your money. That’s because with the digital card, you get to take advantage of Raiz My Finances tools that are built into the Raiz app, in real time, giving you more power to get on top of your finances. My Finance allows you to track your weekly spend. You can also use it to see a breakdown of your expense categories to assist in managing your money better.  

3. Helpful for group expenses

Another easy way to start using the Raiz x bundll digital card right away is to cover group expenses, like a dinner out with friends. With the card, you can pick up the tab without eating into your transaction account, with two weeks to pay via bundll. This gives your mates enough time to transfer the money to you before your bundll repayment is due.  

4. Complements other Buy Now Pay Later Services

Because bundll is accepted anywhere MasterCard is, you can use your bundll card to pay for things bought through the likes of Afterpay and Zip. Just like with any other bundll transaction, you would then have an additional 2 weeks to pay back your instalments.  

5. Make purchases ahead of payday

A Raiz x bundll digital card can also assist close to pay day. The run up to payday can be a challenging time to make your money stretch to cover the items you need day-to-day, especially if you get hit by a financial curveball that life can sometimes throws at you. However, with a Raiz x bundll digital card and its buy now pay later functionality, you can bundle up your expenses and pay them back after payday arrives.  

6. Get extra time when you need it

Using the Raiz x bundll digital card gives you an added bonus – it allows you to defer the repayment of a bundle of aggregated payments for an extra fortnight, if you need it. Thanks to bundll’s ‘snooze’ function, you get the ability to delay the repayment date for a bundll, which can be done with a flat fee of $5. Remember, while your Raiz x bundll card can be a great way to help take extra control of your finances, it’s important to be careful when using a buy now pay later service. Always take some time before you buy to make sure you’re doing what’s best for you.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz. The bundll product is provided by FlexiCards Australia Pty Ltd ABN 31 099 651 877 Australian credit licence number 247415. Bundll, snooze and superbundll are trademarks of Flexirent Capital Pty Ltd, a subsidiary of FlexiGroup Limited. Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Incorporated.
The S&P 500 nears its all-time high as talks fail on a new US stimulus package
17-08-20 George Lucas, Raiz CEO  

The S&P 500 nears its all-time high

The S&P 500 is close to a new all-time high, which is remarkable given the continuing coronavirus pandemic. Putting it in context, the index has risen by over 50 per cent from its intraday low on March 23, recouping all initial losses from the coronavirus crisis faster than in any prior bear market. The explanation for this, in part, is the unprecedented support by central banks and expectations that monetary policy will be kept extremely loose for years to come. A lower interest rate will support equity prices by boosting the sustainable level of price to earnings ratios. Also, the S&P 500 has a higher weight in healthcare and information technology compared to any other major stock market index in the world. In general, earnings per share of firms in the healthcare and IT  sectors are expected to be 30 to 40 per cent above their 2019 levels, by end of 2021. However, it’s  important to take into account that if you exclude the top five firms the index’s performance looks less impressive. It comes in at roughly 5 per cent below its pre-virus level, with share prices of firms in sectors worst hit by the coronavirus crisis, like energy, much lower than that.  

Talks fail on new US stimulus package

In the US, the failure of legislators this week to agree a new fiscal support package to tackle the economic fallout from COVID-19 has so far not made much of a dent in equity markets. The continued disagreement between the Republican-controlled Senate and Democrat-held House of Representatives about how much and what type of spending the US economy needs means that further fiscal stimulus in the US now looks set to be delayed at least until early September. Even so, the lack of extra stimulus over the next month will not derail the economic recovery currently underway, while US President Donald Trump’s efforts to get additional spending and tax relief through without Congressional approval may provide a bit of help at the margin. That said, if major stimulus is delayed until after the November elections in the US that probably would slow the recovery somewhat, which could start to weigh on equity markets.  

What the US election means for investors

Looking ahead to the US elections, it’s clear that the shape of the post-November political landscape in the US will affect markets, depending on the outcome. The odds that the Democrats win full control of Congress have fallen back a touch recently, but they still remain favourites with pollsters.  The chance of Democrat candidate Joe Biden winning the presidential election remains about 60 per cent, reflecting his solid lead in both national and swing state polls. Still, there is ample time for Trump and the Republicans to mount a comeback. A Democrat sweep in November could still create headwinds for US equity markets. In particular, the prospect of higher corporate taxes would weigh on the earnings of most companies, while the possibility of a stricter antitrust laws would pose a challenge to big tech companies.  

Epic Games files antitrust lawsuit against Apple

Indeed, the attack on antitrust has begun already with Epic Games -- the developer of the hugely popular game Fortnite -- suing Apple. For years, app developers like Epic have had to deal with the 30 per cent commission on in-app purchases in  the Apple ecosystem, which developers say the tech giants get away with due to their dominance in the mobile operating system market. Epic is not suing Apple for any damages but under anti-trust rules to change the playing field. This is bound to be politically motivated behind the scenes as no monetary damages are sought.  

Australian jobs growth beats expectations

In Australia, monthly job numbers for July were upbeat. The 114,700 rise in employment in July was much stronger than the consensus estimate of a 30,000 increase.  Employment is now back to its April level, although it remains around 4 per cent below its pre-virus level. Elsewhere, in Malaysia it appears that economic activity is picking back up. GDP was down by 28.6 per cent year-on-year in April but, by June, it was just 3.2 per cent less than the same time last year. In Indonesia, we are not expecting the Bank of Indonesia to change interest rates this week, the central bank will keep rates on hold at 4 per cent.  
Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person's particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website. Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products. General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.
Raiz Rewards in-store partners are now available!
We recently launched our first Raiz rewards in-store partners, allowing you to shop at our partnered brands’ physical stores in Australia to receive a percentage or fixed dollar amount invested back into your Raiz account. Our in-store rewards program takes away any additional steps at the point of purchase like scanning a rewards card or presenting a coupon. Simply activate the in-store offer in the app beforehand and as long as you purchase on one of your linked cards we’ll be able to track the purchase and deposit the reward into your account  

Where can I find the in-store brands?

You can find our in-store brands in the Raiz Rewards section of the app then click the ‘in-store’ category so see eligible brands.  

How can I be eligible for the in-store reward?

To be eligible you need to activate the in-store offer before you begin shopping during the promotion term dates. E.g. If the promotion runs from July 1st 2020 to December 31st 2020, you will need to activate once during that period and can make as many purchases as you like during those dates, no need to activate again. Once you have activated the brand’s in-store page will say ‘ACTIVE’ and you will receive a confirmation email.  

What card do I use for in-store rewards to track?

Make a purchase on your card you've linked as a spending account or Raiz bundll card.  

When will I receive my in-store rewards?

You will automatically receive your reward investment within 90 days from your date of purchase unless otherwise specified in the partner’s Terms & Conditions. If you have any issues after this period, please email support@raizinvest.com.au with proof of purchase such as a receipt or bank statement.  

Do I need to keep the receipt of the purchase?

We recommend holding on to the receipt in case your sale doesn’t track and you need to provide it to our customer service team to pass on to the brand as proof of purchase to investigate.  

What if after 90 days I haven’t received my reward?

If 90 days has passed and you still haven’t received your in-store reward in your Raiz account, please send through a screenshot of the transaction from your bank statement along with the receipt to
support@raizinvest.com.au. We will then undertake reasonable investigations into your request, and our decision in respect of such matter will be final and binding.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.
How to make the most of your spending power with Raiz Rewards
The majority of us have scrolled online for hours trying to find that perfect item or jumped from store to store to find the best deals. Shopping can be fun, but the problem is that it can take a toll on the budget (especially for non-essentials) and interferes with our ability to save for the future. The good news is that you can turn your love of shopping into a way of investing for the future with Raiz Rewards – an easy way to save while you spend. So, if you’re a shopaholic like some of us here at Raiz HQ, then you should keep on reading to discover how you can make the most of your spending power next time you shop.  

So, what is Raiz Rewards?

Raiz Rewards is our loyalty program. Each time you shop with your favourite brands through Raiz Rewards, you will earn a cash reward direct from the brand invested back into your Raiz or Raiz Invest Super account. The amount varies depending on the partner and is typically a % of the purchase price, or sometimes a fixed dollar amount.  

Is it just for online purchases or can I shop in-store as well?

We have over 200 every day and luxury brands available online, and a growing number of participating retail partners who pay Raiz Rewards when you shop at their physical stores in Australia.  

How do I get the partnered brands to invest in me?

To shop online, from within your Raiz App, click on Rewards, select the brand you’d like to purchase from, click the 'Shop Now' link and make your purchase immediately. By clicking on the link, the brands can automatically track your purchase and invest the reward into your Raiz or Raiz Invest Super account. To shop in-store, you need to activate the in-store offer within Raiz Rewards before you make a purchase at one of the brand’s Australian stores. Each in-store brand has a start and end date for their offer, you only need to activate the offer once during those dates and any purchases made on your linked spending card will be eligible. Regardless of whether you are shopping online or in-store, each partner has their own Terms & Conditions so remember to check them first to make sure your purchase is eligible for rewards.  

How do I choose where my Raiz Rewards gets paid?

By default, Raiz Rewards will be paid into your Raiz account. If you have an active Raiz Invest Super account with us, you can choose to have Raiz Rewards paid directly into it, and benefit from additional contributions to grow your retirement savings even more. You can activate this option by clicking on Super > Reward Contribution from within the Raiz App. Keep in mind that when Raiz Rewards is paid into your Raiz Invest Super account they will be classed as voluntary contributions, and you will not be able to withdraw them until you reach preservation age. Your Raiz rewards are only invested into the account you choose. You can switch between your Raiz rewards being invested into your regular or Raiz super account whenever you like.  

How can I pay for my purchases?

For most Raiz Rewards brand partners, if you shop through the links in the Raiz Rewards section of the app, you can normally pay with any card. However, please check the Terms & Conditions for each partner as some may require you to pay with a card attached to one of your linked spending accounts in Raiz. Some partners also specifically exclude purchases made using Buy Now / Pay Later methods even though they may offer them as a payment option during checkout. For in-store rewards, purchases must be paid for with a card that is attached to one of your linked spending accounts in Raiz, or alternatively you can use your Raiz x bundll card!  

When will I get the reward investment?

Raiz Rewards take a little while to appear in your Raiz or Raiz Invest Super account depending on the type of purchase you have made and the partner you shopped with. The time it takes for each partner to track and reconcile your purchase is shown on the partners Terms and Conditions, but generally the expected payment periods are as follows:
  • Most of our partners pay within 30 Days
  • Surveys are normally paid within 45 days from completion of the survey
  • Travel partners pay within 30 days of the date of the last checkout/trip on the booking
  • Energy partners pay within 30 days after your cooling off period (the cool off period is 60 days from date of sign-up)
  • In-store partners pay within 90 days of purchase
 

Raiz Rewards top tips for success

  • Cookies and cross site tracking must be enabled on your browser prior to shopping
  • All ad blocking software must be disabled prior to shopping
  • Compatible browsers are Chrome, Safari and Firefox. Other browsers may not track
  • You must click on the partner store from within Raiz Rewards for the purchase to track
  • Complete your transaction within 2 hours of clicking on the partners store from within Raiz Rewards
  • Do not visit other websites after clicking on the partners store from within Raiz Rewards
  • For each new purchase, return to Raiz Rewards and click on the partners store from within Raiz Rewards again
  • Always read the partner specific Terms and Conditions to ensure your purchase is eligible
 

Your purchase may not be eligible for Raiz Rewards if:

  • You have not followed the tips above
  • A gift card was used as payment method, or a gift card was purchased in the transaction
  • A coupon / promo code (other than those shown on Raiz Rewards) was entered at checkout
  • An order is cancelled, changed after checkout, finalised or amended over the phone, or any items in an order are returned / exchanged
  • Fraudulent activity is detected
 
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.
Raiz Portfolio Performance Financial Year 2019-20
There is always a lot of interest from our community in the performance of our portfolios. In what has been quite a turbulent year, it is pleasing to report the returns of our investment portfolios are above the relevant Chant West industry benchmark (for Moderately Conservative there is no corresponding benchmark). Keep in mind that past performance is not a good indicator of future performance. The Raiz philosophy is about saving and investing small amounts regularly to build your savings - whether for a rainy-day fund, a short-term goal or building a start for your kids. Regular disciplined savings can help improve your financial position in the long run far quicker than choosing the best fund manager. Raiz Portfolio Returns FY 2019-20 Investing small amounts regularly, using our automatic savings features: Round-ups; Recurring investments; and Savings goal, can assist in managing market uncertainty. 80% of our Raiz community invest at least once a month. There is a saying “It’s not about timing the market, it’s about time in the market” 😊 Feel free to learn more from our blogs about our portfolios and the Raiz philosophy:  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.  
Global coronavirus economic fallout continues
Raiz Market Insights 21-07-20 George Lucas, Raiz CEO With Victoria moving to stage four restrictions this week amid a second wave coronavirus outbreak in the state, it’s starting to sink in around Australia that there may be no post-COVID-19 world where everything goes back to normal and the virus is quickly eradicated. This is also the situation overseas. In the US and Europe cases and deaths linked to the virus have started to again rise. In the US, biotech company Moderna, the leading candidate to create a COVID-19 vaccine, which has now gone to stage 3 trials on 30,000 people, will not get FDA approval until it is 100 per cent effective on 50 per cent of the population, in line with the flu vaccination for example. These numbers are still staggering at this level of effectiveness and underscore that there’s no post-corona world where we go back to complete normal.  

Global coronavirus economic fallout continues

As the health impact of the pandemic continues, so too does the economic fallout. This is clear from the raft of euro-zone Q2 Gross Domestic Product (GDP) data released over the past two days, confirming that major euro-zone economies experienced record falls in output. In Germany, GDP fell by 10 per cent quarter-on-quarter, in Italy and France it dropped by 12 per cent and 14 per cent respectively and in Spain it declined by a staggering 18 per cent. In the US, GDP fell by 8.3 per cent quarter-on-quarter, or 32.9 per cent annualised. Still in the US, the government there is still negotiating another stimulus package, with internal disputes inside the Republican party about how to split the money between companies and individuals. They are yet to begin negotiating with the Democrats on the package. Meanwhile in China, the economic recovery there looks robust, with the recent official PMI supporting this.  

COVID-19 cementing big tech dominance

On stocks, the surge in the share prices of big tech -- Amazon, Google, FB, Microsoft, Apple -- since March seems to reflect a view that the coronavirus crisis will likely accelerate the growth of these huge companies. The lack of reaction to the current historic antitrust hearing in US Congress involving these companies presumably means that investors doubt the investigation will result in truly substantive changes to their business models.  

Australia suffers record fall in inflation

In Australia, headline inflation fell 1.9 per cent in the June quarter, marking the biggest plunge in the 72-year history of tracking the CPI. The fall was mainly due to one-off policy changes which will reverse in Q3, so we doubt that deflation will become a lasting feature of the economic landscape. That said, underlying inflation will probably remain depressed for years to come. So, for instance, your 0.20 per cent on your deposit account is still a real interest rate of 2.1 per cent at a -1.9 per cent inflation rate.  

Aussie dollar sell-off remains a puzzle

The latest sell off in the Australian dollar is perplexing, but a partial explanation is the joint fiscal deal agreed in Europe a week or so ago. That clearly appears to have supported the euro, without doing very much for global equities.  Meanwhile, the US has not been able to put a new deal together yet. Another factor may be a slightly delayed reaction to increases in expected inflation, which affect real interest rates and has been one of the driving forces behind the rally in gold. This is mainly due to the massive amount of cash being printed in the US driving an increase in inflation expectations. Now, some of the banks are saying the Australian dollar may get to US80c, with the local currency being driven by the Chinese demand for commodities and a strengthening in economic growth. However, the US dollar is probably moving down because there are currently more sellers than buyers after people piled into US currency at the start of the crisis. Meanwhile,
Bitcoin appears to be acting like it should be the new gold, although it probably isn’t. The recent fall in the dollar and rise in gold seems to have supported bitcoin, which is now priced at over USD11,000.  
Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person's particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website. Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products. General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.
July 2020
Introducing the Raiz Rewards Blog
Raiz Rewards has come a long way since launching in 2017! We’ve now got over 200+ partners across a range of categories including food, fashion, travel, home and more. So that you can stay up to date with news, stories and advice from your favourite partnered brands we’ve launched the Raiz Rewards blog. Our goal is to continue to deliver exciting content about the brands that are investing in your future. Get tips and tricks on how to get the most bang for buck and never miss any of the latest news on Raiz Rewards.  

What is Raiz Rewards?

Raiz Rewards is our rewards program that sits within the Raiz app. For online sales simply click the link in the Raiz app or for in-store purchases click to activate then purchase on your linked card. When you do make a purchase with one of our partnered brands, you’ll earn a percentage of your purchase or flat dollar amount re-invested back into you Raiz account or Raiz Super Account. Innovated from a cash-back model, we instead give our customers a ‘cash-forward’ as the cash is used to buy shares. With brands like eBay, Dan Murphy’s, THE ICONIC, Booking.com, Best&Less and more! There is something for everyone.  

What is the Raiz Rewards Blog?

The Raiz Rewards blog sits separate from the Raiz Invest blog to bring you interesting articles about the rewards program and the brands promoted in it. From product launches, current sales or updates or even life advice, we’ll make sure you’re always on top of the most recent news our partners have to share. Check out some of them now:  

How can I be updated with the latest blogs?

Like our Raiz Rewards Facebook page to keep up to date on all of the latest blogs and any Raiz Rewards news.   Check out the Raiz Rewards blog at www.raizrewards.com.au  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.
Make your money go further with the Raiz x bundll card
At Raiz, we’re committed to helping our customers take control of their finances by making money management as easy, affordable, and intuitive as possible. That’s why Raiz has partnered with bundll to create the new Raiz x bundll digital Mastercard for our customers. It provides flexibility, convenience, and budgeting power over how and when you pay for purchases.  

What is bundll?

bundll is an instantly issued digital Mastercard for your mobile phone that lets you make multiple purchases of up to your bundll limit at any store where Mastercard transactions are available, with the digital bundll Mastercard linked to your digital wallets, including Apple Pay or Google Pay. The way bundll works is that each week purchases made via bundll over the previous 7 days are aggregated, or ‘bundled up’ into one, with users having up to a fortnight available to you to pay that ‘bundll’ off.  There is no interest charged, like a credit card, on your outstanding bundll balance.  

How is a Raiz x bundll card different to a regular bundll card?

Raiz’s unique partnership with bundll makes it super easy for Raiz users to access and enjoy the benefits that bundll has to offer, with the added flexibility of using Raiz as a funding source. That’s because Raiz users can securely and quickly apply for bundll using their existing Raiz account information and link their accounts. If your Raiz initiated application is approved, you will be issued with a co-branded Raiz x bundll digital card, which will then be available to use in either Google Pay or Apple Pay on your mobile phone. It takes just one tap to add it to your digital wallet.  

Who’s eligible for a Raiz x bundll card?

If you see a Raiz bundll link in your Raiz app then you have been invited to apply. The process is simple, just follow the prompts within your Raiz app to download the bundll app, then go through the quick pre-filled application. Once you have a Raiz x bundll card, you’ll be given a maximum spending limit on your digital bundll Mastercard. Your spending limit depends on the individual background information you provide as part of the sign-up process.  

What are some ways I can use the Raiz x bundll card?

With Raiz x bundll, you have the option to use your Raiz account to pay for everyday spend, like groceries or petrol, in-store or online, and then have a fortnight to repay the amount interest-free. It’s super easy to use online or in-store. When shopping, your Raiz x bundll card is used just like in the same way as any other card. Simply open the digital wallet on your mobile phone, swipe to reveal your Raiz x bundll card and simply tap your phone to pay or enter your card details. Raiz x bundll also gives you flexibility when it comes to budgeting for everyday items. There is no interest charged on your outstanding bundll balance but with a Raiz x bundll account, you can take advantage of bundll’s ‘snooze’ feature that allows you to delay payments for an extra fortnight for a $5 fee. There are plenty of opportunities to be creative with how you spend and budget with the Raiz x bundll card. We’ll keep you informed of bundll card hacks and clever ways to use your card here on the Raiz blog. Watch this space!  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz. The bundll product is provided by FlexiCards Australia Pty Ltd ABN 31 099 651 877 Australian credit licence number 247415. Bundll, snooze and superbundll are trademarks of Flexirent Capital Pty Ltd, a subsidiary of FlexiGroup Limited. Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Incorporated.
How to use your Raiz annual tax statement for your tax return
Tax time is here again, and even for the financially savvy amongst us, tax time can still be daunting and a bit of a chore. However, with a little help it doesn’t have to be so stressful. Around the 3rd week of July each year, Raiz will issue you with an Annual Tax Statement which you can download from within the Raiz App, or via our website. We will send you an email when it is available for your account. Even if you have sold all your investments during the financial year, you will still be able to log back into your Raiz account to download the statement when it is available. The Annual Tax Statement that Raiz provides to you will break down the different types of financial events which have occurred during the previous tax year on your Raiz investment portfolio. This information is important, and it will enable you, or your appointed tax professional, to successfully complete your annual tax return to the ATO. While many people use a tax professional to file their annual tax return, an increasing number of people submit their own tax return using myTax which is part of the ATO’s myGov online portal. This guide explains how to fill out your myTax return using the information on your tax statement to “Personalise” your tax return. Keep in mind that this guide should only be used by Australian resident taxpayers preparing individual tax returns. It should always be read in conjunction with the ATO guidance notes accessible from within myTax, and should you have any questions in relation to using myTax please contact the ATO directly. Disclaimer: this guide does not take into account your personal circumstances and does not constitute tax advice and should not be relied upon as a substitute for tax advice. We recommend you seek your own independent tax advice to address your personal circumstances.  

Example Raiz Annual Tax Statement:

 

Step 1 – Personalise your myTax return

Be sure to select “Interest”,” Dividends”, “Managed fund distributions”, and “Gifts, donations, interest, dividends, and the cost of managing your tax affairs” by ticking the corresponding boxes. This allows you to declare your numbers in the right place. Once you have done the above, click on [Next] within myTax and you will see the “Interest”, “Dividends”, “Managed fund distributions” and “Deductions” sections available for completion.  

Step 2 – Insert amounts from Annual Tax Statement.

Let’s begin with adding the interest from the Raiz Annual Tax Statement into myTax. Click on [Add/Edit] on the “Interest” section of myTax and enter the information as follows: After entering the “Interest” information, click [Save and Continue] and proceed to enter “Dividends” information as follows: After entering the “Dividends” information, click [Save and Continue] and proceed to enter “Managed funds distribution” information as follows: Note: If the amount shown at 18H on the Raiz Annual Tax Statement is in brackets, this means that you have made a capital loss on your Raiz investment in that financial year. If you make a capital loss, you can use it to reduce any capital gains you made in the same financial year from other investments. If you have not made a capital gain in the same financial year, you can use this loss to reduce a capital gain in a later year. If this occurs, you do not enter anything into 18H, and instead carry the loss forward to a future financial year and offset it against a future Capital Gains. Please consult a Tax professional regarding any questions you may have regarding Capital Gains and how they relate to your personal circumstances. After entering the “Managed funds distribution” information, click [Save and Continue] and proceed to enter “Deductions” information as follows: You have now successfully entered all information from the Raiz Annual Tax Statement into the myTax system.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz. This guide does not take into account your personal circumstances and does not constitute tax advice and should not be relied upon as a substitute for tax advice. We recommend you seek your own independent tax advice to address your personal circumstances.
Investors watch as the Q2 earnings season kicks off
Raiz Market Insights 21-07-20 George Lucas, Raiz CEO Investors are closely watching Q2 earnings season that kicked off in the US last week as it will shed more light on how hard COVID-19 has hit listed companies in different sectors. The pandemic’s effect on the US economy started to be felt in mid-March when lockdown measures were first imposed, meaning that this earnings season will be key in assessing coronavirus fallout.  

Healthcare, IT, consumers staples holding up in crisis

In general, the earnings of US firms in the healthcare, information technology and consumer staples sectors appear to have held up best, while those of firms in the energy, consumer discretionary and financials sectors seem to have fared worst. Returns from the information technology and consumer discretionary sectors stand out as being surprisingly strong, given their prospective earnings and sales results. That owes much to mega-cap stocks that drove the market up in the first half of 2020 and continue to do so. Since late March, investors have been focusing on the prospect of a strong economic recovery from its lockdown-induced slump. With that in mind, the biggest threat to the overall stock market now is probably a renewed hit to economic activity from the recent resurgence of coronavirus cases.  

S&P 500 resilient despite US surge in COVID-19 cases

Looking at where we’re at now, two surprising things have happened since early June. First, the S&P 500 has hardly fallen, despite the surge in new coronavirus cases in the US and signs that the economic recovery there is stalling. Second, it has performed no worse than major European indices, even though outbreaks are increasingly under control on the other side of the Atlantic. There are several explanations for the S&P 500’s resilience. First, there have been a range of support measures for the financial system, while another view is that the market has just ignored what has happened in the economy altogether and has been driven indiscriminately higher by new money. The unusual composition of the S&P 500 has helped to offset the influence of the broad economic trends outlined above. Technology-related sectors and in health care are significantly overrepresented in that index relative to most benchmark indices elsewhere, and compared to the structure of the US economy. The sectors are especially resilient to the coronavirus-induced slump. The S&P 500 also contains nearly all the world’s very largest listed firms, including several global oligopolies with vast cash reserves. Big firms with strong balance sheets have been much better able to weather the coronavirus storm than others. It should be noted that within the index several industries like hotels, restaurants and leisure, energy and airlines, are struggling. They are highly-vulnerable to virus-induced changes in behaviour, have slumped by 13 per cent, 23 per cent and 28 per cent, respectively, since 8 June.  

China data upbeat despite COVID

In China, June trade data was better than expected. It showed inbound shipments jumped by 14.1 per cent, the largest month-on-month increase since 2012, adding to evidence that domestic demand was strong at the end of Q2. After a sharp contraction in Q1, China’s GDP grew 3.2 per cent year-on-year last quarter, taking it back above the pre-virus level reached in Q4 2019 in seasonally-adjusted terms. What’s more, monthly activity and spending figures for June showed that growth was accelerating heading into the third quarter, on the back of policy stimulus. Labour market data was also encouraging, showing the improved job conditions helped drive a recovery in disposable incomes. Looking ahead, the recovery in China is likely to slow over the remainder of the year now that the initial boost from re-opening post COVID-19 has passed.  

Australia’s jobless rate hits 22-year high

In Australia, the number of unemployed people rose by 69,300 to 992,300 in June, pushing up the unemployment rate to 7.4 per cent for the month, according to the latest ABS figures. We hope that the unemployment rate has now peaked.  
Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person's particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website. Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products. General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.
Raiz Quarterly Update from George Lucas, Managing Director/CEO
raiz quarterly update The 2019-20 financial year has been bitter-sweet for Raiz Invest. At a corporate level, it has been a year of remarkable achievement, both in Australia and Southeast Asia. However, this achievement has been overshadowed by COVID-19, a human tragedy that has exacted a heavy toll on many of our customers’ lives. Australia may have managed this pandemic better than most countries. However, the second wave that has erupted in Melbourne, forcing another strict shutdown, is a reminder that we are still combatting this virus and its impact on the economy. Throughout this pandemic, which has been with us for nearly five months, the health, safety and well-being of our customers and staff remain a priority, and we hope you and your families are keeping safe during these troubled times. The last quarter (April-June) of the 2019-20 financial year capped a very successful 12 months for Raiz. There is no better evidence of this than the fact both Funds Under Management (FUM) and active customers rose, with FUM up 30.6% to $453.6 million and active customers up 15.1% to 223,730 during the financial year. Pleasingly, superannuation FUM grew despite the fact customers are drawing down their super by taking advantage of COVID-19 Early Release. Revenue also rose by more than 60% (unaudited), illustrating that revenue in the Raiz business model can grow significantly faster than customer growth, in contrast to transactional financial services businesses. This growth again highlights the customer loyalty we enjoy, which is a testament to our commitment to service and the increasing relevance of our products and services. Raiz is a savings and investing mobile first platform, but we are also proud that our moderate (balance fund) portfolio option has outperformed the largest superannuation fund in Australia, AustralianSuper, for the past two financial years. The performance of AustralianSuper has been a bellwether for the superannuation industry. In May, we offered users exposure to Bitcoin, a relevant alternative asset class for many of our customers, with the launch of our seventh investment portfolio, Sapphire. It is not for everyone, but we have more than $11 million in FUM and over 8500 customers using this portfolio. We will continue to expand our investment options as part of our commitment to offer the complete savings and investment package. In Southeast Asia, it was exciting to announce in June that our joint venture subsidiary, Raiz Malaysia, had been issued a Digital Investment Management licence, and that we have started marketing our products to the 33 million Malaysians. We have more than 12,000 sign-ups, and growing, in just over a month. Indonesia continues to grow. We have learnt a lot from our beta testing, we have attracted over 95,000 signups to the App. We are now launching the new App that includes all our learnings from the beta testing and will start introducing fees. Indonesia is a unique market, accelerating at a significant pace. The fact that we have a licence and strategic partnership relationships ensure we are well positioned to participate in this growth. Raiz’s future has been set. The Australian business continues to be cashflow positive. We have $13 million in the bank as at 30 June 2020, and our Southeast Asian operations are up and running. We have been tested as a company by this pandemic, but management and staff have been equal to the task. What has driven us in these past difficult months has been our customers’ loyalty at a time when many of you are experiencing real hardship. So, let me thank you. And, please, stay safe. Yours sincerely, George Lucas Managing Director /CEO  
  Important Information The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz. Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.
How to understand end of year financial reports
When it comes to making smart moves in the share market, a good place to start can be looking at an annual report. That’s because a company’s annual report is often a key way for potential investors to get an insight into the financial state of a company. Understanding an annual report can be confusing and even frustrating for those new to investing, so here are a few tips to help get you started.  

What is an annual report?

Simply put, an annual report includes information about the company, its activities, its financial accounts such as profit and loss, and strategies over the previous 12 months. This publicly available information contained in the annual report is published by a company in accordance with the accounting rules and laws and includes the directors’ report, the financial report and the auditor’s report on the financial report. In Australia, a company’s annual report will include a report on renumeration of key personal and often also include non-compulsory elements that provide further windows into its operations. For instance, there may be reports from the CEO and chairman or reports related to sustainability or corporate social responsibility aimed at further enhancing shareholder knowledge of these areas.  

When is an annual report prepared and published?

There are strict rules here in Australia. Annual reports must be prepared each financial year by all public companies as well as all large proprietary companies. Listed companies must prepare and send a copy of their financial accounts to all members at least 21 days before their annual general meeting and within four months of the end of the financial year. Thankfully, all listed companies also publish their financial statements and reports with the ASX, making them publicly available and on their website and notify shareholders of their action. Companies also lodge copies of their annual reports with ASIC.  

What to focus on when reading an annual report?

One of the key parts of a listed company’s annual report is the directors’ report. This is especially important because it contains information that shareholders of the company -- and potential investors -- may need to make an informed assessment about its operations, its financial position, its business strategies, and its future prospects. The company’s financial report is another important part to consider. It provides information about the financial performance and financial position of the company, and tells the story of the company in number, and can be particularly useful to potential investors keen for an insight into its financial health.  

The four primary financial statements

Delving into more detail, it can be useful to look at annual report’s profit and loss statement, balance sheet, statement of changes in equity, and the statement of cash flows. These reports are prepared in strict accordance with the accounting rules, which are also disclosed in the financial statements, though some of these accounting rules are not intuitive. In summary:
  • The profit and loss statement shows the revenue and expenses of the company during the reporting period
  • The balance sheet shows the assets and liabilities of all the resources controlled by the firm and all its obligations
  • The statement of changes in equity reports all changes to equity during the financial period, for example if a company issues new shares to raise capital
  • Statement of cash flows shows the cash inflows and outflows into the company’s bank account over the reporting period.
These statements can be great to check out as they show information relevant to the previous 12 months and comparative figures for the prior corresponding period on how the financial performance of the company has altered over that time. While often overlooked, the auditor’s report is another valuable section of a company’s annual report. It’s the product of auditors -- independent accounting practitioners appointed by the directors and confirmed at the AGM -- who are engaged to provide an opinion on the financial report. This section sometimes includes matters that will cause the auditor to issue a report that is qualified and can be useful to keep an eye on.  

Being Prepared

Remember, if you’re thinking about diving into a listed company’s annual report it helps to be prepared. So, before you get started make sure you’ve done your homework on the industry sector that the company operates in and the current and future market conditions.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz. Past return performance of the Raiz product should not be relied on for making a decision to invest in Raiz and is not a good predictor of future performance.
This is the expected dividend schedule for Raiz ETF's (FY2020/21)

Keen to know when your next dividends will be paid? See the dates below. In the 19/20 financial year, Raiz re-invested over $11.7M in dividends back to our users.  

What is a Dividend?

As well as gains on market returns from investing, dividends (or distributions) is money paid by a company back to you, their shareholder, out of its profits. Raiz users choose to invest in one of our six investment portfolios, that comprises a mix of nine different exchange traded funds (ETF). The underlying stocks of these ETFs which make up the Raiz portfolios pay dividends from time to time. The ETF provider pays these dividends out, quarterly or twice yearly.  All dividends received by Raiz will be automatically re-invested back into your Raiz investment account, and your chosen portfolio. See our blog on 
What is an ETF and how they differ. When they are paid out will depend on what portfolio you are on. Below is a schedule on when we expect dividends to be paid by the ETFs accordingly for the financial year ending 2020.
Note: Some of these dates are estimated timings based from last year’s payment schedule that will change. Please refer to each ETF provider’s website for more details on exact dates when made available.
 

A quick summary on each ETF payout:

  • AAA (Cash) pays monthly
  • IVV (S&P 500) pays quarterly
  • IEU (S&P Europe 350) pays twice yearly
  • STW (S&P 200) pays quarterly
  • RCB (Corp. Bond) pays quarterly
  • IAF (Composite Bond) pays quarterly
  • ETHI (Sustainability) – pays twice yearly
  • RARI (Responsible Investment) pays twice yearly
  • IAA (S&P Asia 50) pays twice yearly
 
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.   Past return performance of the Raiz product should not be relied on for making a decision to invest in Raiz and is not a good predictor of future performance.
You asked, we listened: here's a breakdown of our portfolio selection.
Recently we’ve had some requests from the community to release a breakdown of the selection of our portfolios. Today we’re happy to share that with you! Whilst this data is interesting to mull over, it shouldn’t be your primary consideration in deciding which Raiz portfolio is the most suitable for you. The Raiz portfolios are structured to align with different specific risk profiles, which range from conservative to aggressive. When investors have a longer investment timeframe, they are generally comfortable with taking on more risk, as the market will have many years to recover in the event of a pullback. That’s why you will often hear the phrasing that in the long term, the market tends to go up. A more aggressive option may be more suitable for a long-term investor. On the other hand, a short timeframe in the market could easily see a downturn. In the event you need to sell your investment during a market downturn, you might be forced to accept lower (or negative) returns. Therefore, when choosing your portfolio with a short-term goal in mind – it may generally be best to invest in a conservative option to reduce the likelihood of the investment decreasing in value in the short term. Whilst we’ve tried to make investing across different risk classes as simple and clear as possible, everyone’s personal tolerance for risk and circumstances are different, so you must read and understand the Raiz Invest PDS and seek professional financial advice where appropriate.  
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.   Past return performance of the Raiz product should not be relied on for making a decision to invest in Raiz and is not a good predictor of future performance.
Global recovery strategies put to the test
Raiz Market Insights

06-07-20

George Lucas, Raiz CEO

In the wake of the resurgence of coronavirus in Victoria, it’s clear that the most effective form of government action to ensure a quick recovery will be a plan that reassures Australians it is possible to reopen without risking new outbreaks of the virus, and that if new outbreaks do emerge, like in Victoria, they can be contained without having to reimpose national or state-wide lockdowns. If governments get the ongoing response right, it will encourage those who have been saving during lockdown to spend thus mitigating the need for significant additional ongoing fiscal support from the governments. However, if fear and uncertainty about Covid-19 continues then Australians’ precautionary savings may likely increase, and consumer demand will remain depressed. In this scenario, there will be a need for significant additional stimulus.  

Coronavirus and the future of retail

We’ve seen large net savings into the Raiz App in April, May and June. If this continues it does not bode well for the long-term recovery of retail demand in Australia. This enforced savings is also one of the reasons why retail money has been pouring into equity markets and supporting them since the lockdowns started, globally. This leaves the federal government in a tricky position. If it pulls JobKeeper and JobSeeker too early the recovery will be weaker, however if they keep it too long inflation pressures may develop and equity markets may become overvalued quicker than would otherwise be the case. In my opinion, it’s better to err on the side of providing more stimulus. Another question for the government to consider as JobKeeper and JobSeeker are wound down is whether it will switch to infrastructure investment, which provides the biggest bang for your fiscal buck. This debate over the future of fiscal stimulus is likely to intensify over coming weeks.  

Chinese shares surge to 5-year high

Looking overseas, Chinese stocks rallied to a five-year high after a survey suggested the nation’s economy was recovering from Covid-19. The CSI 300 benchmark index of Shanghai and Shenzhen-listed shares lifted 1.9 per cent on Friday to close the week at its highest level since June 2015. Still in China, the Caixin/Markit purchasing managers’ index showed that activity in the Asian superpower’s services sector rose in June at its quickest pace in more than 10 years. The survey noted that Chinese “businesses were highly confident about the economic outlook” but that employment continued to fall and it would take “time for the economy to fully recover”. So far, China’s Covid-19 case counts appear under control and the reopening of the economy is relatively successful.  

RBA likely to keep rates on hold

Locally, the Reserve Bank of Australia (RBA) Board meets on Tuesday and is tipped to keep the official cash rate at its record low of 0.25 per cent. The meeting comes after data last week showed retail sales rose above their pre-virus level in May and we hope that they will climbed further in June.  
Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person's particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website. Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products. General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.
Bouncing back with a budget
Despite COVID-19 restrictions easing across the country, the economic fallout from the pandemic continues to be felt many thousands of Australians from all walks of life. However, it’s also the perfect time to look forward and make sure your finances are stronger than ever to meet whatever challenges arise down the track. Indeed, with so many Aussies still experiencing employment disruption like layoffs and reduced hours, now is an ideal moment to look at your budget, actual spending, and savings to make sure you can navigate these unprecedented times. With that in mind, here are some simple and effective ways to budget with the money you have right now to make sure you build a safety net of savings and protect your financial health for the long term.  

Revamp your budget

When it comes to budgeting, now’s a good time to get money smart so you can emerge stronger and more prepared in relation to your personal finances. First, you’ll need to reassess your income. When it comes to this side of the ledger, you can split things up into dependable income, like your salary and things like capital gains from shares or dividends, and examine what they look like now. Depending on your individual circumstances, you might find your income has a new baseline if your hours have been reduced or if you’ve been impacted by a layoff caused by recent economic disruption. However your spending may have fallen more, creating excess savings which could be put away for a rainy day before your expenses increase again. Doing this analysis now, after forced cut backs in spending during COVID may give you a foundation to start reassembling a sustainable budget that works with your expected income during these difficult times.  

Cut your expenses

If you’re strapped for cash, the next thing you may want to do when figuring out your budget is look at how you’re spending your money and where you can make cuts. Some of these cuts may have already happened due to COVID with the forced reduction in your discretionary expenses like shopping, eating out, subscriptions and holidays. On fixed costs, like rent, utilities and insurances, you can also get active by looking for better deals or asking for payments to be temporarily suspended or deferred, then restarted as social distancing eases and your financial situation becomes more certain.  

Take a close look at essentials

With essential spending like housing, it also pays to get creative. For instance, if you’re renting, consider letting out a room to a lodger to help make up a sudden fall in income. Or, if you’re a home owner worried about falling behind on mortgage repayments, don’t hesitate to reach out to your lender about options for reducing your payments temporarily. You could also consider refinancing your home loan if that suits your particular financial circumstances.  

Money for a rainy day

While some people may need to make fundamental changes to their budgets, today’s altered conditions also represent a chance to plan and safeguard against other unknown shocks that may occur down the track. This is where building an emergency fund now is a smart idea. Just putting a small amount away on a regular basis can add up over time and make a big difference. How much you should aim to have in your emergency fund will differ from person to person, but it’s advisable that it can cover the basics like rent or mortgage repayments, food, loan repayments, transport, utilities and phone and internet for two or three months.  

The final word

In these unprecedented times, being as smart as possible with your money is more important than ever. If history has taught us anything when it comes to budgeting, it’s that being on top of your personal finances goes a long way when you’re looking for extra security and peace of mind in times of greater uncertainty.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app Click to download the Raiz app[/caption]
  Important Information The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser or tax accountant before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz. Past return performance of the Raiz product should not be relied on for making a decision to invest in Raiz and is not a good predictor of future performance.
June 2020
Tax time: how COVID-19 could boost your tax return
Jar with moneyWith the end of financial year approaching fast, millions of Aussies are set to lodge tax returns in very different financial circumstances than before the COVID-19 crisis. While coronavirus has caused a lot of disruption across the country, tax time is a chance to take advantage of extra measures aimed at helping taxpayers navigate the pandemic. Here are some helpful tips to keep in mind when completing your tax return this year to make sure you maximise your refund during these tough times. As everyone’s tax circumstances are different please check with your tax advisor what is relevant to you.  

Get your working from home expenses right

With thousands of Australian employees working from home during the crisis, there’s likely to be a surge in the number of taxpayers claiming working from home deductions. In response to the expected pick up in this area, the ATO has rolled out a temporary method that allows taxpayers to claim 80 cents for each hour they work from home doing the job they normally carry out in an office, and have incurred additional expenses. In a big win for taxpayers, it means, unlike before the pandemic, you don’t need to have a dedicated area of your home like a home office set aside to get a deduction.  

Automatic offset to apply

Millions of Aussies are also set to benefit from between $255 and $1,080 in tax cuts for the 2018-19 financial year -- a welcome boost in the wake of COVID-19. Taxpayers earning over $126,000 are ineligible, but those earning under $37,000 will receive up to $225, while those on between $37,000 and $126,000 can get up to the full $1,080 in tax relief. The tax cut will be automatically applied when you lodge your tax return.  

Don’t forget the instant asset write-off

EOFY is always a time when deals abound, but this year things are even better if you need to make a business purchase thanks to an expanded instant asset write-off program. The program means firms can now claim accelerated depreciation on new assets worth up to $150,000 as part of the federal government’s response to COVID-19. The federal government has also extended the deadline for making claims from July 1 to December 31.  

Deductions for protective clothing

This year is also set to see a pick-up in taxpayers claiming deductions for protective gear like face masks, gloves, gowns or sanitiser needed for work in customer- and client-facing roles. Importantly, taxpayers in industries like healthcare, retail and hospitality can only claim these items if they paid for them and were not reimbursed.  

Other deductions to keep in mind

COVID-19 aside, there are many deductions that can be easy to overlook at tax time. For instance, if you use your mobile phone to make work calls, text messages or use the data for work purposes, then you can claim it as a deduction. Internet expenses also can be claimed. If you work from home and have your internet connection in your name, then it’s possible you could also claim that expense. In this case, you can estimate your monthly internet use as a percentage of the total household usage. Similarly, when it comes to using your car or travel, you can make a claim for work related travel and vehicle expenses provided they meet the eligibility criteria set out by the ATO. Other common, but sometimes overlooked deductions, include union fees, donations of $2 or more to an appropriate charitable organisation and rental property expenses like gardening and lawn mowing, pest control and bookkeeping fees. But remember, whatever deduction you’re seeking to claim, you will need to have a record to support it and you should check with your tax advisor. Records, usually receipts, must be kept these for five years from when you lodge your tax return in case the ATO asks you to substantiate your claims.  
 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:
[caption id="attachment_3372" align="aligncenter" width="351"]download-raiz-app