FAQs for InvestSMART's Fundlater investment service
This month InvestSMART launched Fundlater, a service that allows you to invest a minimum of $4,000 of your own money and receive a loan of $6,000 to help you get started investing via an InvestSMART Diversified Professionally Managed Account. You can find out more here.
We’ve been inundated with enquiries about the service and last week held a live webinar with our CEO to cover off the most common. Below you’ll find the recording of the webinar.
During the webinar we also received more questions than we could answer. We hope you’ll find these answers helpful:
What am I investing in?
Fundlater is a loan facility to help people reach the minimum investment amount of $10,000 required to open an InvestSMART Professionally Managed Account. There are four investment options to choose from, Conservative, Balanced, Growth and High Growth. The portfolios are constructed and managed by the InvestSMART team and use exchange traded funds (ETFs) to diversify Australian shares, international shares, property, infrastructure and bonds. You can see the four portfolio options here.
Do you receive dividends and franking credits with Fundlater?
Yes, your holdings will pay dividends. These dividends will be paid as cash into the cash component of your portfolio and used to buy more holdings for you when the cash percentage builds up. You will receive any franking credits associated with these dividends.
Do I receive dividends based on my $4,000 investment of $10,000?
Your InvestSMART Professionally Managed Account (PMA) with a Fundlater loan will hold $10,000 worth of investments and therefore you will receive dividends based on this.
What is a non-recourse loan, and do I need to provide a form of security for the loan?
With a non-recourse loan, a lender cannot go after any additional assets you own if the debt surpasses the collateral. In the case of the Fundlater loan you invest a minimum of $4,000. This acts as collateral for the loan.
Does InvestSMART conduct credit checks?
No, we do no not.
Can I invest more than $4,000 initially?
Yes, you can invest more than $4,000 and still receive the full $6,000 loan.
What happens after I’ve paid off the loan?
Once you have paid off the loan you will own the full investment portfolio and we highly encourage you to continue with your payments. Instead of paying off the loan they will be added to your portfolio and used to buy more holdings and continue to grow your wealth. Paying off your loan is just the beginning. Don’t let the good investment habits you’ve formed go to waste.
Click here to view more on Fundlater and click here to read the Fundlater terms and conditions.
Borrowing money to invest can increase gains in a rising market and magnify losses when a market declines.