You’re a Raiz customer, but you’ve seen that Pearler has recently launched Pearler Micro - a micro investing option that sits within Pearler’s all-in-one share investing platform.

Maybe you’re interested in investing directly in shares as well as making micro investments. Or perhaps your portfolio is starting to grow and you’d like to switch to a lower, flat monthly fee. Or maybe you’ve even noticed how well Pearler’s long-term investing community is riding out the current market volatility and you’d like to be a part of the club!

Whatever your reason, you’re interested in making the switch from Raiz to Pearler and you’re wondering: “how could I invest like I do on Raiz, using Pearler Micro?” You’ve come to the right place. This article outlines how to replicate three of Raiz’s most popular portfolios – Aggressive, Emerald (ESG), & Moderately Aggressive – using Pearler Micro.

How to build your Raiz Aggressive portfolio using Pearler Micro

Raiz Aggressive is aimed at long-term investors who are able to withstand a reasonable amount of market volatility. It is quite well-aligned with our community’s approach to investing (and isn’t that “aggressive”, by the way - “aggressive” is just a way to describe how much market volatility a portfolio is expected to experience).

Because we have such a strong and supportive long-term investing community, most of our +50,000 community members invest like this, or in portfolios that experience even more volatility, to maximise long-term investing returns.

This portfolio invests 90% of your money in growth assets, such as Australian and international shares. The remaining 10% goes into income (interest-earning) assets such as corporate and government bonds.

If you’re looking to replicate this on Pearler Micro, you’re in luck! Pearler Micro’s Diversify & Chill option has exactly the same split between growth assets and income assets - and costs less.

Here’s the summary:

As you can see, Diversify & Chill is very similar to Raiz Aggressive, but costs less. And the cost difference increases the larger your portfolio value becomes.

It’s worth noting that we’ve included the underlying exchange-traded fund (ETF) management fee in addition to the platform fee in this analysis. Often micro investing platforms glaze over this fee because it’s difficult to understand. At Pearler, though, we’re all about transparency and education.

The simple explanation is that when you invest on Pearler or Raiz (and most other micro investing platforms), your investment is placed into one or more ETFs based on your selection. The people who make ETFs, known as the ETF managers, get paid by taking a fee from the ETF itself.

As an investor, you don’t ever see the ETF management fee. It’s simply deducted from each ETFs’ value at the end of every month. However, it’s an important investment consideration because you don’t want to invest using a platform that has low platform fees but high underlying ETF fees.

In this case, Diversify & Chill and Raiz Aggressive have very similar ETF Management Fees. However, Raiz Aggressive has a much higher monthly platform fee, particularly for larger balances. By the time your portfolio grows to $100,000, you’d be saving $20 per month in fees!

How to build your Raiz Emerald portfolio using Pearler Micro

Raiz Emerald is aimed at long-term investors who are able to withstand a reasonable amount of market volatility and want to invest in companies that meet high environmental, social and governance (ESG) standards. It is also relatively well-aligned with our community’s approach to investing, with the one big difference being that our community typically likes to invest less in income assets and more in growth assets than this portfolio prescribes.

Specifically, Raiz Emerald invests 73% of your money in socially responsible growth assets, such as ESG Australian and international shares. Meanwhile, the remaining 27% flows into income (interest-earning) assets such as corporate and government bonds. It’s worth noting that the income assets in Raiz Emerald aren’t specifically ESG income assets, they’re just generic assets.

If you’re looking to replicate this on Pearler Micro, you can pair two Pearler Micro options: Australian Large ESG Companies & Global Large ESG Companies. By doing this, you will be investing in global and local ESG growth assets 100% ESG assets. However, you won’t be investing in any income assets.

If ESG investing is most important for you, and/or you would like to increase your exposure to growth assets, then this substitution would be great for you!

Here’s the summary:

As you can see, the Pearler Micro bundle of 50/50 Australian Large Companies/Global Large Companies results in a 27% larger allocation to growth and a 27% greater investment in ESG assets compared to Raiz Emerald. It also costs less! And the cost difference increases the larger your portfolio value becomes.

Once again, we’ve included the underlying ETF management fee in addition to the platform fee in this analysis.

In this case, the Pearler Micro bundle and Raiz Emerald have very similar ETF Management Fees. However, Raiz Emerald has a much higher monthly platform fee, particularly for larger balances. By the time your portfolio grows to $100,000, you’d be saving $18 per month in fees!

How to build your Raiz Moderately Aggressive portfolio using Pearler Micro

Raiz Moderately Aggressive is like Raiz Emerald without the focus on ESG assets. It’s for aimed at long-term investors who are able to withstand a degree of market volatility. As above, it isn’t “aggressive” - “aggressive” is just a term for describing how much market volatility a portfolio is expected to experience.

Raiz Moderately Aggressive invests 73% of your money in growth assets, such as Australian and international shares; and the remaining 27% in income (interest-earning) assets such as corporate and government bonds.

To replicate this portfolio on Pearler Micro as closely as possible you would select the Diversify & Chill option. However, this will still result in 17% more exposure to growth assets and 17% less to income assets.

If you would like a portfolio that is more focused on growth assets and are happy with the additional volatility that this will bring then it could be worth considering making the substitution. However, if you genuinely want a portfolio that is more skewed to income assets, then this substitution wouldn’t be appropriate for you.

Here’s the summary:

As you can see, Diversify & Chill results in a 17% larger allocation to growth assets. It also costs less and the cost difference increases the larger your portfolio value becomes.

This figure also includes the underlying ETF management fee in addition to the platform fee.

Once again, Diversify & Chill and Raiz Moderately Aggressive have very similar ETF Management Fees. However, Raiz Moderately Aggressive has a much higher monthly platform fee, especially for higher balances. By the time your portfolio grows to $100,000, you’d be saving $19 per month in fees!

When will I be able to recreate Raiz's other portfolios on Pearler Micro?

Currently, Pearler Micro does not offer the ability to invest in income assets other than through the Diversify & Chill option. Even then, income assets account for only 10%.

The reason Pearler has chosen to do this is because presently, the vast majority of Pearler users are ultra long-term investors with +10-year investment horizons, and Pearler offers a supportive community that enables investors to weather significant market volatility, such as the conditions we’re currently experiencing. In these circumstances, it usually makes sense for investors to invest 90% or more of their funds in growth assets.

However, as Pearler continues to welcome a wider variety of long-term investors, Pearler Micro will be adding investment options that focus on income assets. Once an income option is added to Pearler Micro, you will be able to recreate almost all of Raiz’s other portfolios. You will also be able to better match Raiz Emerald and Raiz Moderately Aggressive. We expect this to occur before the end of 2022, so stay tuned!