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Target Market Determination
For Raiz Invest Australia Fund (the Fund)
This TMD is issued by Instreet Investment Limited (ABN 44 128 813 016, AFSL 434776) (Instreet) to offer interests in the Raiz Invest Australia Fund, a registered managed investment scheme (ARSN 607 533 022).

The Raiz Invest Australia Fund allows automatic micro-investing into multi-asset portfolios of the investor’s choice and offers an easy way to regularly invest small or large amounts of money using the associated Raiz App on a mobile phone or the website.
1. About this document
This TMD is required under section 994B of the Corporations Act 2001 (Cth) and Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (Cth). It sets out the target market for the product, triggers to review the target market and certain other information. It forms part of Instreet Investment Limited’s design and distribution framework for the product.

This document is not a product disclosure statement and is not a summary of the product features or terms of the product. This document does not take into account any person’s individual objectives, financial situation, goals or needs. Persons interested in acquiring this product should carefully read the Product Disclosure Document for Raiz Invest Australia Fund before deciding whether to buy this product.

Product Disclosure Statement to which this target market determination applies

This TMD applies to the following Product Disclosure Statement:

Other documents that should be read in conjunction with this TMD:
2. Important dates
Date from which this target market determination is effective: 5/10/2021
Date when this target market determination was last reviewed: 5/10/2021
Date when this target market determination will be next reviewed: 1/1/2023
3. Class of investors that fall within this target market
The information below summarises the overall class of consumers that fall within the target market for Raiz Invest.

The Fund is designed for investors who:
  • want to invest in multi-asset portfolios from just $5.00;
  • have a diversified investment approach;
  • are in their accumulation, pre-retirement or in their retirement life stage;
  • are looking for an investment product that provides options for low, medium, high and very high risk and return trade-offs; and
  • are looking to purchase an investment product through a direct online channel and did not receive personal financial advice.

The Fund is not designed for investors who:
  • have a concentrated investment approach; and
  • are looking for an investment product offered through personal financial advice.

Investment product description and key attributes

The Fund is a registered managed investment scheme. If a person applies to participate in Fund, they apply to receive an interest in the Fund known as a Raiz Investment Account. The minimum investment amount is $5.00. They can make regular contributions to increase the value of their Raiz Investment Account, they can withdraw all or part of their investment, and their investments are held beneficially for them (subject to any fractional interests, which are pooled). On application the Fund establish one interest – one Raiz Investment Account – for each investor.

Money in the Raiz Investment Account is invested into a multi-asset Portfolio selected by the investor (Selected Portfolio). Some of the Portfolios access a mix of different exchange traded funds quoted on the ASX (ETFs) which are a pre-selected asset allocation. The Sapphire Portfolio has a mix of ETFs and Bitcoin. The Custom Portfolio allows an investor to choose the portfolio weights of a selection of ETFs and Bitcoin and create their own asset allocation.

The Fund does not pay distributions. Any distributions received by the Fund in respect of any ETF Units allocated will be automatically re-invested into the investor’s Raiz Investment Account.

The significant features of the Raiz Invest Australia Fund are:
  1. The Fund is a micro-investing product designed to make investing and saving simple, and accessible to all. A person can apply for a Raiz Investment Account with just $5.00;
  2. The investor chooses a Portfolio into which their Raiz Investment Account will be invested. Six portfolios are comprised of ETFs only that are quoted on the ASX. The other portfolios comprise ETFs but can also include Bitcoin quoted on the Gemini Exchange. Bitcoin is treated as an alternative asset class and the maximum target weight is 5%;
  3. One of the key features of Raiz is the ability to allocate fractional interests in ETF Units (or Bitcoin) to individual investors. The Fund will allocate fractional interests in these ETF Units (or Bitcoin) to their Raiz Investment Account, corresponding to the amount of funds they have invested in their Selected Portfolios. Fractional interests allow the Raiz Investment Account to be fully invested in the market from as little as $5 and for investors to consistently invest funds as they become available, rather than having to wait until they have enough money to buy a complete ETF Unit (or Bitcoin);
  4. The Fund does not charge switching fees if they change their Selected Portfolio;
  5. The Fund does not charge fees for making contributions or withdrawals;
  6. The Fund does not charge any brokerage, trading or transaction fees for purchasing the ETF Units (or Bitcoin); and
  7. The Fund is designed to encourage regular saving. The Fund is based on the principle that regular investment, even if in small amounts, can lead to large savings over time.

To be eligible for the Fund, an investor must be:
  • a resident of Australia;
  • at least 18 years old at the time of application;
  • an individual or a Self-Managed Super Fund (SMSF).

Liquidity Risk
All assets held by the fund can be liquidated in less than 10 days.

Redemptions and Withdrawals
Redemptions are done daily.

Objectives, financial situation, and needs

The Fund may suit investors who:
  • have capital growth as an investment objective;
  • do not have capital preservation as an investment objective;
  • do not have capital guarantee as an investment objective;
  • do not have regular income as an investment objective;
  • are potentially looking for an investment product that provides exposure to specialist themed ESG investment option;
  • are looking for an investment product as a satellite investment solution(< 25%), core component (25-75%) solution or a standalone solution (75%-100% of total investible assets); and/or
  • are looking for an investment product that permits withdrawal requests at all frequencies – from daily to annually or longer.

The table below sets out the class of investors that each investment option within the Fund has been designed for.

Conservative portfolio
Key Features: This portfolio has a high portfolio weighting to fixed income bond and cash ETFs and may suit an investor who does not like risk and needs access to their money in the near future.

Investment Objective: To provide a low level of risk which corresponds to low expected returns over the long term.

Minimum Suggested Investment Time Horizon: 3 months
Moderately conservative portfolio
Key Features: This portfolio has a moderately high portfolio weighting to fixed income bond and cash ETFs and may suit an Investor who is looking for some capital growth but is mostly concerned about protecting their money.

Investment Objective: To provide a lower level of risk which corresponds to low to moderate expected returns over the long term

Minimum Suggested Investment Time Horizon: 1 year
Moderate portfolio
Key Features: This portfolio has a balanced portfolio weighting to Australian Equities; International equities; fixed income and cash and may suit an Investor who is looking for good medium to long term results with moderate capital growth, without large up-and-downs in the short term.

Investment Objective: To provide balanced level risk which corresponds to moderate expected returns over the long term.

Minimum Suggested Investment Time Horizon: 2 years
Moderately aggressive portfolio
Key Features: This portfolio has a moderately high portfolio weighting to Australian and international equities and may suit an investor who is prepared to take more risk in exchange for potentially higher returns over the medium to long term, and is comfortable with volatility and the possibility of negative returns.

Investment Objective: To provide a moderate to high level of risk which corresponds to moderate to high expected returns with capital appreciation over the long term.

Minimum Suggested Investment Time Horizon: 3-5 years
Aggressive portfolio
Key Features: This portfolio has a high portfolio weighting to Australian and international equities and may suit an investor who is willing to take more risk in exchange for greater returns over the long term and is comfortable with volatility and the possibility of negative returns.

Investment Objective: To provide a high level of risk which corresponds to high expected returns with capital appreciation over the long term.

Minimum Suggested Investment Time Horizon: 5-7 years
Emerald portfolio
Key Features: This portfolio has a socially responsible Investment theme with a moderately high portfolio weighting allocated to socially responsible Australian and international equities and may suit an investor who is prepared to take more risk in exchange for potentially higher returns over the medium to long term, and is comfortable with volatility and the possibility of negative returns.

Investment Objective: To provide a moderate to high level of risk, which corresponds to moderate to high expected returns with capital appreciation over the long term.

Minimum Suggested Investment Time Horizon: 3-5 years
Sapphire portfolio
Key Features: This portfolio has a very high-risk profile due to the inclusion of Bitcoin. The portfolio is weighted to Australian and international equities as well as including a holding in Bitcoin. It will only suit an investor who is prepared to take high risk in exchange for potentially higher returns in the long term and is comfortable with high volatility, a holding in Bitcoin, and is prepared for significant negative returns.

Investment Objective: To provide exposure to Bitcoin in a managed way, as an alternative asset class, but the risk level remains very high.

Minimum Suggested Investment Time Horizon: Greater than 5 years

Consistency between target market and the product
This product is likely to be consistent with the likely objectives, financial situation and needs of the class of investors in the target market. This is based on an analysis of the key terms, features and attributes of the product and a finding that these are consistent with the identified class of investors.
4. How this product is to be distributed
Distribution channels
This product is designed to be distributed through the following means:
  • Online – Raiz website
  • Mobile app

Distribution conditions
This product should only be distributed under the following circumstances:
  • Individuals that meet eligibility requirements; and
  • Individuals who through the Raiz website or mobile app have created an account in their own name or on behalf of a Self-Managed Super Fund.

Adequacy of distribution conditions and restrictions
It has been determined that the distribution conditions and restrictions will make it likely that investors who purchase the product are in the class of investors for which it has been designed.

The promoter and distributor has reviewed all regulatory documentation (Product Disclosure Statement, application forms, disclaimers, onboarding information collected) as well as the data collected during the application process to ensure that investors who are outside the target market are filtered out to the extent practicable. The promoter and distributor is comfortable that the disclosure in documentation, together with the questions and data collected during application, enable it to ensure that distribution of the product occurs to a class of investors who are within the target market.

As a result, we consider that the distribution conditions are appropriate and will assist distribution in being directed towards the target market for whom the product has been designed. We will review on a quarterly basis the outcomes the product is providing to investors and determine if changes to the product or the distribution strategy are required.
5. Reviewing this target market determination
We will review this target market determination in accordance with the below:

Initial review
1/1/2023
Periodic reviews
1/1/2026

Every 3 years from the initial review
Review triggers or events
Any event or circumstances arise that would suggest the TMD is no longer appropriate. This may include (but not limited):
  • Material change to key product features, fund investment objective and/or fees;
  • Material deviation from benchmark / objective over sustained period;
  • Significant dealing outside TMD;
  • Material or unexpectedly high number of complaints (as defined in section 994A(1) of the Act) about the product or distribution of the product; and
  • The use of Product Intervention Powers, regulator orders or directions that affects the product.

When a review trigger has occurred, this target market determination will be reviewed within 10 business days.
6. Reporting and monitoring this target market determination
We will collect the following information from our distributors in relation to this TMD.

Complaints
Complaints (as defined in section 994A(1) of the Act) relating to the platform and products offered on the platform, where the nature of the complaints relate to product design, insurance claims, product availability and distribution conditions. The distributor should provide all the content of the complaint, having regard to privacy.

Complaints are to be reported on a quarterly basis.
Significant dealings
Distributors will report if they become aware of a significant dealing in relation to this TMD within 10 business days.

A significant dealing includes:
  • Inconsistency of distribution conditions with the TMD;
  • More than 5% of investors who have acquired the product but are not in the target market, including the proportion of investors who are part of a class of investors that have been specifically excluded from the target market; and
  • Potential/actual harm to investors if investors outside the target market acquire the product.