Here, Which? takes a look at what funds are on offer and how the new platform compares.
What does Monzo Investments offer?
Monzo customers will be able to invest as little as £1 and pick from three funds offering different levels of risk: cautious, balanced and adventurous.
The investments are put together by BlackRock – a leading fund manager.
The three choices of investments are all ‘multi-asset’ funds, meaning they invest in a range of different types of assets such as shares, bonds, and other funds.
a fund manager will do it for you.Monzo says the investments are flexible, with the option to change or cancel deposits at any time, and the ability to withdraw money when needed, without charge.
Find out more:What fees will you pay?Monzo will charge investors with its free current aMonzo Plus or Premium customers will be able to invest at a discounted fee of 0.49% – as the platform fees are reduced to 0.35%.Investments will be available to open in the existing Monzo banking app and will sit alongside savings, borrowing and current account information so you can track the performance of the funds alongside managing your other accounts.
Find out more:How does Monzo Investments compare?
With only three funds, Monzo Investments offers a lot less choice than its competitors – although some beginners might prefer this simpler set of options.
Also, as you can only invest in one of three funds, you won’t have a buffer if the fund does badly. On other platforms you could invest more broadly, and the bad performance of one fund could be bolstered by others doing better in your portfolio.
When we put Monzo Investments through our platform fees analysis with its standard 0.45% charge, it came middle of the pack for charges on investment portfolios worth £5,000 and less. However, if you were to invest larger amounts of money – especially £25,000 or more – Monzo Investments would be one of the most expensive options.In our analysis, welooked at the cost of investing in funds in a stocks and shares Isa for one year, assuming four purchases and four sales (rounded to the nearest pound);only considered platform fees (as fund management fees are applied in varying ways – eg Monzo Investments charges the same 0.14% fund management fee across all its investments, while other platforms have varying fees for each individual fund) looked at the cost of the platform fee charged annually, and didn't factor in any investment growth. You can use the table to see how Monzo Investments compares withother investment platforms when investing £5,| Platform | Fee on £5,000 investment | Fee on £25,000 investment |
|---|---|---|
| AJ Bell | £25 | £75 |
| Aviva | £20 | £100 |
| Barclays Smart Investor | £72 | £74 |
| Bestinvest | £20 | £100 |
| Charles Stanley Direct | £24 | £88 |
| Close Brothers Asset Management | £13 | £63 |
| Fidelity | £90 | £88 |
| Halifax Share Dealing | £112 | £112 |
| Hargreaves Lansdown | £23 | £113 |
| HSBC | £13 | £63 |
| Interactive Investor | £92 | £92 |
| Moneybox | £35 | £125 |
| Monzo Investments | £23 | £113 |
| Plum | £58 | £148 |
| Santander Investment Hub | £18 | £88 |
| The Big Exchange | £13 | £63 |
| Vanguard | £8 | £38 |
| Average | £39 | £91 |
Is investing right for you?
While you can typically get a better return on your savings by investing them, investing isn’t right for everyone at every stage of life.
You should have between three and six months’ worth of living expenses in an account you can easily access before you start investing. This is to cover emergencies such as losing your job or needing to pay an unexpected but essential bill.
You also shouldn’t start investing if you have any high-interest debt, such as credit card debt, because it's likely your debt will gain interest faster than your investments gain value.
Find out more:source https://www.which.co.uk/news/article/monzo-launches-investment-platform-how-does-it-compare-anijA3d3V6kb