Chip has launched a new investment product that will give users of its savings app the opportunity and ability to invest in BlackRock-managed funds.
The UK fintech company, which has saved just under half a billion pounds to date for its 355,000 users, is launching the investment product with three funds from the BlackRock Consensus multifund range, branded as BlackRock Cautious, Balanced and Adventurous.
The money is invested by BlackRock, which looks after more than $8.67 trillion assets worldwide, into a collection of smaller tracker funds, containing a wide spread of equities and bonds, in markets all around the world.
Of the three funds, BlackRock Adventurous has returned up to 8% on average per year since it was created, whereas Cautious and Balanced have returned an average of 6% each year per fund since their creation in 2012.
The Consensus fund range has been operating for nearly a decade, but this is the first time these funds are being offered in a savings app such as Chip’s. The fintech plans on adding more funds as it develops the product.
The names of these funds are informed by the maximum percentage of that fund that can be invested in more volatile equities (stocks and shares), versus the percentage invested in lower risk assets such as cash and bonds. For example, the fund that Chip calls the BlackRock Cautious can have a maximum of 35% of equities, but the BlackRock Adventurous fund can have up to 85% invested in equities.
The investment product, which was originally tested via a controlled rollout to a queue of 17,000 customers, will be available to all Chip customers on ChipAI and, soon, ChipX plans.
The investment platform fee will depend on the plan the user is on:
- ChipAI plan
- 0.75% annual platform fee, collected monthly (£0.50 minimum monthly fee)
- Cost of ChipAI plan is £1.50 every 28 days
- ChipX plan
- 0.25% annual platform fee, collected monthly (no minimum monthly fee)
- Cost of ChipX plan is £3 every 28 days
Simon Rabin, chief executive officer of Chip, comments: “Investing can be intimidating, there’s a perception that you need to be very wealthy, or have years of experience before you can start investing your money. But we believe it’s something everyone should consider doing for the long-term.”
“Investing, whilst carrying an element of risk, is a powerful tool to grow your money. Everyone, absolutely everyone, should feel empowered to put their money to work. Investing should not be an elite, exclusive world dominated by dusty legacy wealth managers or macho crypto-trading ‘bros’.”
“We believe investing should not be about stock picking, or single-share trading, or a get-rich-quick gambling culture. With our investment platform we wanted to build something that offers returns over the long term, of course investors’ capital is still at risk, but we’re aiming for much less drama than you’d get with stock-market hype, like the recent GameStop stock saga. I believe that all people should have access to tools that aim to grow their wealth steadily over time; trading meme shares or buying bitcoin is not it.”
“Our goal is to democratise the world of investing, so we want to offer an easy-to-use investment platform that makes investing simple and accessible to all.”
Rabin continues: “To achieve this, we are offering BlackRock’s globally diversified investment funds through the platform, which will give our users an instant portfolio with one investment. After all, they are the biggest investment manager in the world and look after more than $8 trillion of the world’s assets.”
“The three funds we’re offering at launch are just the start. When ChipX launches later this year, we’ll bring even more funds into the app. Our goal is to change how you look at your money forever.”