Finance series - Spaceship Voyager

source: spaceshipinvest.com.au

Hi, thanks for reading my article on Spaceship voyager. . I hope I can maintain your interest until the end where I discuss my experiences using the product and how it has changed my thinking as an investor. Please note I have not been paid by Spaceship for this article and there are no referral links herein*.

Who are Spaceship?

In their words, “Spaceship is an Australian financial services company whose vision is to engage young people in actively building a strong and secure financial future”. The company’s first products were in the superannuation space and in the lead up to their launch these products were heavily promoted by its high-profile investors such as Peter Thiel and Mike Cannon-Brookes. Perhaps best known for ASIC’s investigation into their misleading marketing claims that led to the corporate regulator fining them $12,600 for not being clear enough that 79% of their funds were invested in index-tracking funds. ASIC found that their marketing could have led prospective members to believe that their funds were actively managed. To their credit, they are clearly sticking to their mission of engaging millennials in investing, and that has followed through into their subsequent microinvesting product, Spaceship voyager.

What is Spaceship voyager?

Spaceship voyager is a mobile-first microinvesting product similar to Raiz (formerly Acorns). The premise is that users invest an initial amount (I invested $500), and set a regular amount (mine is currently set to $30/fortnight) to be invested thereafter in a ‘set-and-forget’ style.

Owing to the dubious start to the company’s history, Spaceship voyager often seems to be mistaken for the company’s superannuation products and thereby discounted by many (see some of the comments here and here). However, this is an easy to get started with product that provides a low-cost way to get stock market exposure long-term to outperform miserly interest rates in savings. Users choose between two portfolios: Index and Universe. Index (as the name suggests) tracks the ASX 100 and the 100 largest global companies by market cap, whereas Universe is actively managed using Where the World is Going (WWG) ratings - a rules-based market-weighted index that identifies what Spaceship believes to be “high quality, differentiated and defensible businesses”.

What’s in the Universe portfolio?

The FAANGs (Facebook, Apple, Amazon, Netflix and Google), BATs (Baidu, Alibaba, Tencent) and ASX darlings such as A2 Milk, Altium, Afterpay Touch and Treasury Wines are all represented within this portfolio. The maximum weighting for any stock in the portfolio seems to be 1.99% so it’s well-diversified to protect against company-centric events.

Pros and cons

Pros

Easy setup - Setup is easy and can be done in the app within minutes. I chose the Universe portfolio.

Low fees - Currently it’s free for balances up to $5000 for both portfolios. For balances over $5000, the fee is 0.05% annually for the Index portfolio and 0.10% for the Universe portfolio.

Dollar-cost averaging - By far the best part about Spaceship voyager. See the ‘Has using Spaceship voyager changed how I invest?’ section below for more on this.

Customer service - Their team has been prompt and helpful getting back to me with my queries.

Customer engagement - They send out regular emails with editorial content which to me doesn’t feel at all spammy. I can’t vouch for the quality of the content but they are building millenials’ knowledge base by consistently reaching out to their community.

Cons

Lack of features in app - I don’t need to say much about this. The app is very basic but at least you can see the current value of your investment, and read their editorial content.

No roundup - This is the feature that first got me interested in Acorns (now called Raiz in Australia). I’d love for there to be a way to round up the ‘change’ from my credit card purchases to an investment vehicle such as this. For the fees you pay for this, there’s no wonder this feature is not there. I suspect they’re working on this and will implement along with a suite of other features when they decide it’s time to charge for portfolios under $5000.

Company history - At first I was a little reluctant to go all in on this, but reading this review eased my concerns. The reviewer was able to withdraw their funds without any fuss, which was my main worry.

Transfer of funds - The time from when cash leaves your savings to when the funds appear in the app is currently two to three days. This is slower than other transfers (such as transferring funds between accounts in different banks) which is a bit dodgy.

My experience using Spaceship voyager

My Spaceship voyager experience inspired me to write this article. My initial deposit was in early September 2018, when markets were near all-time highs. Thereafter, up until just before Christmas there was a pretty steep correction (close to 20%). All through this period I was making the regular payments into Voyager but it was a pretty ugly sight each time I’d look at the app to track my investment. However, the beauty of dollar-cost averaging is that when the market is lower I’m able to pick up more units because obviously the unit price is cheaper. Since Christmas, the market has recovered well. It hasn’t got back to all-time highs but thanks to dollar-cost averaging, I’m in the green now (first time was about Tuesday last week!) and loving it!

Has using Spaceship voyager changed how I invest?

I’ve always known that dollar-cost averaging was the smart way to invest but have never implemented this strategy myself. I have done a bit of ‘buy the dip’ but that strategy is flawed (won’t go into details here - it’s been widely written about elsewhere). With microinvesting products, this is how it works out of the box and it seems to work really well during steep market corrections and recoveries. As a result, I’ve set up a separate offset account (aka ‘bucket’) and started periodically transferring 10% of my after-tax income there. When that hits $5000 (should be every eight months), I will withdraw that and invest that into the market - no matter what the market is doing. Also, I will withdraw the money from Spaceship when it’s about to hit $5000 to avoid the fees (with initial deposit of $500 and fortnightly transfers of $30, this will take years).

*Updated to include referral link after claiming steem rewards for this post.

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