5 min read.

What types of investments do you offer?

12 September 2019

You can choose from ethical or environmentally friendly investments, emerging markets, or big trends like robotics and cyber security. Our investments are mostly Exchange Traded Funds (ETFs) and Exchange Traded Commodities (ETCs) and all are suitable for longer term investing. For full details of our investment options, go to the Invest section of the app.

Exchange-traded funds (ETFs)

An ETF is a type of investment fund. An investment fund is a vehicle that can be used collectively by numerous customers to purchase investments. Customers may want to invest in an ETF to take advantage of the economies of scale by pooling their money, for the greater management and purchase expertise, and for the lower investment fees than a customer may otherwise be able to achieve on their own.

ETFs are a particularly efficient type of investment fund, so costs are normally low. They are very transparent (so you have a clear picture of what is being bought and sold within the fund), and they are liquid, meaning it’s easy to enter/exit and you’re not tied in for any amount of time. ETFs are also highly regulated and closely scrutinised, meaning they are generally suitable for members of the public to buy.

Synthetic ETFS

A synthetic exchange traded fund (ETF) tracks the index without owning any underlying physical securities. It is subject to greater scrutiny and tends to be better at tracking indices and provides a competitive offering for investors seeking access to remote reach markets, less liquid benchmarks, or other difficult to execute strategies that would be costly for traditional exchange traded fund to operate.

Exchange-traded commodities (ETCs)

An ETC is a debt instrument (a form of IOU) that allows you to indirectly invest in certain commodities (like gold, oil, or cotton) by taking part in how that commodity is doing in the stock markets. The ETC issuer guarantees your investment by using your invested money to buy either the commodity or government-issued treasuries (the ‘collateral’). This means if the ETC issuer failed to give you the performance of the commodity for any reason, there would be another way of getting money back to you, by selling the collateral. ETC issuers will buy physical commodities that are easily stored (like gold) but if the commodity is perishable, then the ETC issuer will buy treasuries instead.

ETCs aren’t regulated in the same way as funds, but they are approved by the FCA as they fall under the Prospectus Directive. This means the ETC documents must all be approved by the FCA before the ETCs can be sold to customers.