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OpenInvest review: Professional portfolio management
Invest in a diversified portfolio of Australian and global stocks designed by leading fund managers.
Good for
- 16 investment portfolios to choose from
- Portfolios categorised by risk profile and investor type
- Invest in Australian + global shares, bonds, cash + ETFs
- Choose from 4 leading fund managers
Not so good for
- Monthly portfolio and subscription fee
- Minimum initial investment of $20,000
OpenInvest offers investment portfolios from top fund managers including BlackRock and Schroders.
Although it's not technically a robo-adviser as you don't receive any personal advice, it does help investors choose a portfolio by categorising them by risk profile and offering information about the kind of investor each would be best suited to.Â
Stocks, bonds, cash, ETFs
Investment product
$20,000
Minimum Investment
16
Number of Portfolios
From $7 per month
Fees
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How does OpenInvest work?
While there are plenty of "robo-advice" type platforms around these days, OpenInvest sets itself apart with its impressive selection of fund managers and investment portfolios. Between its range of managers, there are 16 portfolios to choose from, each broken down by investment risks, holdings and costs.
Investors that sign up to OpenInvest currently have the option of choosing from four fund managers – BlackRock, InvestSense, SG Hiscock & Company and Schroders. Each fund manager offers the same set of portfolio options from "defensive" to "growth" and each have a minimum $20,000 investment, although the fees do vary. After your initial investment, you can top up your portfolio in increments of $1000 or more.
What are the portfolios?
Investors have four portfolio types to choose by each of the four fund managers. While these portfolios vary depending on the fund manager you choose, they all follow the same basic risk profiles:
- Defensive income
- Sustainable income
- Robust Growth
- Maximum Growth
The Defensive Income portfolios are targeted towards people that have a low risk tolerance, such as retirees or those nearing retirement. Because of this, the assets invested are typically heavy on row-risk fixed income investments such as bonds or cash, and hold less growth assets like stocks.
The Maximum Growth portfolios sit at the other end of the scale and are better suited to people with a high risk tolerance who are happy to take on the risks of short-medium term market volatility in exchange for greater growth potential. These portfolios tend to be overweight global or Australian stocks and ETFs.
Which assets you'll be invested in will depend on which fund manager you choose and what their strategy is. For example, BlackRock invests funds into a combination of its iShares index fund ETFs that range from fixed income to global shares. Meanwhile, InvestSense offers portfolios that combine stocks, managed funds, bonds and cash.
What are the costs?
There are three main monthly costs on OpenInvest – the model portfolio fee and OpenInvest fee. The fund management fee depends how much you're investing, which portfolio you choose and which fund manager.
This sounds complicated, but it's displayed very prominently on the platform, so it's easy to switch between options to see the difference in fees – it typically ranges from 0.03% to 0.06% of your invested funds per month. There is also a transaction cost when you add or remove funds from your portfolio, which also depends on your fund manager. The transaction fee ranges from around 0.01% to 0.1%, depending on how much you invest.
The OpenInvest fee is free for the first 12 months, after that it's 0.35% of your invested funds per year.
How to open an OpenInvest account
To join OpenInvest, you need to be at least 18-years-old and an Australian resident. There's also a minimum $20,000 initial investment, although subsequent transactions only need to be $1000 or more.
You'll need to sign up from the website, after that you can download the mobile app from Apple or Android stores or access the platform via desktop.
You'll need to provide:
- Personal details
- Company or Trust Details (if applicable)
- Tax file number
- Bank details
Verdict
OpenInvest offers a unique product in a market that is often confusing for new or casual investors to get started. Although you can invest in a portfolio of stocks through exchange traded funds or managed funds, it's not always clear whether it's high-risk, low-risk or suitable for you. OpenInvest goes a long way toward making this a lot clearer by displaying each portfolio's risk profile, asset allocation and fee structure.
In many ways it mirrors what other other robo-advisers are doing with a few key differences. Most robo-advisers offer a handful of ETF portfolios curated by the robo-adviser's own fund managers. OpenInvest doesn't curate any of the portfolios itself, instead it features 20 portfolios designed by external leading fund managers. These portfolios are specifically designed to match the risk-profiles featured by OpenInvest to make it easier for everyday investors to understand.
This makes it an especially interesting entrant to the market and certainly worth checking out if you're looking for a good place to invest your savings.
