In 2020, Raiz launched a new portfolio type that includes Bitcoin. The Sapphire portfolio from Raiz includes 5% bitcoin. This new portfolio makes investing in Bitcoin as simple as investing in other assets like shares and etfs.
But is it a good investment? I can’t tell you if this is a good investment for you, but I can lay out some of the facts around the portfolio to help you make a better decision. So before investing in the Raiz Sapphire portfolio make sure you read this post.
It’s a simpler way to invest in Bitcoin
Buying Bitcoin can seem a little tricky. Most platforms are trading platforms, which aren’t designed for the average retail investor. On Raiz you don’t need to worry about the complexities of trading/exchanging bitcoin. It’s just part of your portfolio.
It’s quite a high Allocation
Raiz has chosen an allocation of 5% for the portfolio. This means that 5% of the portfolio is made up of Bitcoin and the rest is made up of ETFs. I did notice that a massive 20% of the portfolio is made up of Corporate Bonds. These bonds are generally considered to be lower risk. But they don’t deliver massive returns. I’m guessing Raiz wanted to add a stable backbone to the portfolio as Bitcoin is so volatile.
Would I personally invest 5% of my capital into Bitcoin? As a younger person that allocation doesn’t see too bad. If I was older I certainly wouldn’t want to put so much into something so volatile.
Bitcoin is Risky
I always say; only invest in Bitcoin and other cryptos what you can afford to lose. The upside potential of Bitcoin could be huge. Mean a small investment now, could equal a large return in the future. But it could also crash. Raiz suggests that for an investment class such as Bitcoin you should be looking to hold it for 5+ years. During that time it could move around a lot, but the hope is that over a longer timeframe it will become more stable and due to its fixed supply will appreciate in value.
Just remember this is a risky portfolio. If you’re using Raiz to save for a house deposit or a holiday in a couple of years, then this portfolio might be too volatile for that.
The Fees are Higher
So the fees on the Sapphire portfolio are higher compared to the other portfolios. On the other portfolios you pay a 0.275% fee when your balance is over $10k (and a flat monthly fee when it’s under that amount). On the Sapphire portfolio you pay a 0.275% fee + $2.50 per month regardless of balance size.
Because of this fee structure I wouldn’t recommend this portfolio if you have just $100 or so to invest. This portfolio is definitely designed for higher account balances ($5k+).
If you’re investing small amounts each week into this portfolio, then it’s one of the cheapest ways to buy Bitcoin.
In conclusion – My Review of the Raiz Sapphire Portfolio
I think it’s a pretty innovative product. For people looking to invest in Bitcoin, then I think it could be something to look at. I currently invest in the Raiz Aggressive Portfolio and can’t see myself switching to Sapphire. I also hold some Bitcoin and other cryptos. It doesn’t make a lot of sense for me and my financial goals. Let me know in the comments what you think of this portfolio.
Tip: Raiz offers a bonus of $5 for new accounts. You can find out more about that here.