Thoughts on Stake Accumulate

ThePeterGriffin on 26/05/2025 - 13:10
Last edited 26/05/2025 - 13:10

With UBank recently lowering its interest rate, I’ve been exploring alternative options. ING currently offers 5.40% p.a. (with hoops), which is decent. However, this morning I received an email from Stake announcing their new product — Stake Accumulate. It’s a managed fund targeting returns of 2% above the RBA cash rate, which currently comes to 5.85% p.a. after fees.

Curious to hear your thoughts — does the higher potential return justify the additional risk compared to traditional savings options like ING?

https://hellostake.com/au/accumulate
PDS > https://assets.contentstack.io/v3/assets/blte98f61d722cde430…

Financial

Related Stores

Stake
Stake

Comments

  • Xyzzy on 26/05/2025 - 13:44
    +3

    Note your money is not quite as accessible as at Ubank. It's a few business days or more.

  • Duckie2hh on 26/05/2025 - 14:42
    +1

    managed fund

    Well how much extra interest would you like for taking on risks?

  • dtc on 26/05/2025 - 14:48
    +5

    It 'aims' to be 2% above RBA but thats only about 1% above HISA. So for 1% return you risk not actually getting the expected returns (they might even make a loss) and no government protection. 0.51% MER is pretty high although the 2% return is after fees.

  • DingoBilly on 26/05/2025 - 14:56
    +3

    Managed funds generally will never outperform passive funds as a whole.

    You'd be better off just investing in ETFs directly rather than using this.

  • scalebearer on 26/05/2025 - 15:44
    +1

    On the surface, it just looks like a fund that will invest in safer assets.

    The fees for it also seem a bit high. I suspect Stake know this as well, given that they've hidden this in the 3rd FAQ in the bottom half of the page.

    Stake Accumulate has a management fee of 0.51% p.a (inclusive of GST, less any RITC or ITC), of the net asset value of the fund, plus recoverable expenses (which are capped at 0.36% p.a). Transaction costs also apply.

    So anywhere between 0.51% to 0.87%.

    Investments: Fixed income securities (such as cash), debt instruments (like government and corporate bonds) and private credit. The fund may use derivatives, short selling and leverage for hedging purposes or to increase investment exposure.

    So according to this, they may short sell stuff, which doesn't always work out to increased returns, but does guarantee that a human has to do some work to figure out what to buy/sell.
    I imagine a good chunk of the 0.51% to 0.87% fee goes towards paying these people.

    If you're into active investing where you pay people to try and beat the market, then great.
    If you're into passive investing and want the savings (from not hiring aforementioned people) to be passed onto you in the form of lower fees, then you should look elsewhere.

    All in all, I'd say this is clearly supposed to be a higher margin product to balance out the cheap $3 trades that they use as a loss leader.

  • netjock on 26/05/2025 - 16:19
    +1

    Because it is a managed fund you don't get deposit protection.

    Their target means they make what additional they return by juicing up the returns.

    Also how solid is that target?

    What happens if the market drops 10% do they stop withdrawals to protect all investors etc.

  • WoodYouLikeSomeCash on 26/05/2025 - 16:28
    -1

    Better off just buying QQQ (15% annualised return) or SPY or a similar ETF.

Login or Join to leave a comment
Login Join