What is CIRCA5000?
CIRCA5000 formally Tickr is an investment app that aims to bring the idea of impactful investing to the normal retail investor or beginner investor. We have recently seen a wave of interest in the idea of “Ethical Investing”. 90% of the users of CIRCA5000 fall within the 24-39 year old bracket, so this app is solely aimed at the Millennial age group, who traditionally have an increased empathy and awareness of some of the ethical issues of businesses.
There is a £5 Credit to get started with CIRCA5000 when you click here.
CIRCA5000 formally Tickr only launched in January 2019, so a relatively fresh company, but since then have raised more than £3m from crowdfunding to expand the app.
The idea of CIRCA5000 is simple. Make ethical investing simple. This sounds great for those who really want to make a difference in the world with their investment power. Your investment will be placed in a passively managed ETF, so there is very little influence required from your side. History has shown that investing ethically has not had any negative impact upon the returns for an investor. However, these historical tests have been based upon actively managed investment portfolios, and not passive ETFs like CIRCA5000 is using. Therefore, scepticism has to be shown for how effective a passive platform will perform in the long term.
Setting up CIRCA5000
Setting up a CIRCA5000 account is incredibly simple. You simply have to download the app, and start creating an account. You will need to choose your account type:
- Stocks and Shares ISA: This gives £20k per year tax free investing. You can only open a single ISA per year
- General Investment Account (GIA): You can invest an unlimited amount in a GIA. However, your gains made here are all taxable. You may wish to use up your £20k in the S&S ISA before you put money in your GIA
- Junior ISA (JISA): Allows you to save up to £9,000 per year for your child, tax free. Once your child turns 18, they are given access to the account. You must have an ISA or GIA account with CIRCA5000 in order to set up a JISA
Once you have selected your account type, you will select your “theme”, or the type of investments you wish to focus on. There are plenty of sub-themes which a conscientious investor might focus on:
- Equality: This is split into different sub-themes of Gender Equality, Healthcare innovation, diversity and ageing population.
- Disruptive Tech: Digitalisation, automation, robotics and cyber security. If you’re the kind of person who thinks improvement to the world is going to stem from innovation and technology, then this is the category for you!
- Climate Change: This looks at avoiding fossil fuel companies and more towards renewable energy. This has sub-themes of “Clean Energy” and “Global Water”. If you’re someone who really empathises with improving the green-energy of the planet, then this is likely the theme for you
- Combination: Can’t choose a single theme above? Then you can opt for a combination portfolio instead!
Each theme will then have selected ETFs within them, and you will get a proportion of your portfolio allocated to each of these ETFs to provide a high level of diversification. Your allocation of ETFs/Bonds/Cash will be dependant on the risk level you choose. This can be chosen from three categories of “Cautious”, “Balanced”, or “Adventurous”.
You will get the first 30 days with CIRCA5000 for free. However, after that, there is a flat fee of £1 per month. This doesn’t seem like much, especially if you’re investing £500+ per month. However, if you’re a small investor and only putting £50 a month into your account, then that £1 completely wipes out most of the gains you may make in a single month. 1% fees are incredibly high when you could just do a bit of research and find ETFs where the fees are 0.03%. This doesn’t seem like much on the face of it, but once you compound that difference over 40 years until your retirement, you are talking about some massive measurable losses on your potential investment.
So, the answer is to just make sure you’re investing a higher amount to avoid paying a high fee in relation to your account? Well, not really, as once your account reached £3,000 you will be charged an additional 0.3% on the balance of your account over that threshold. Then on top of that there is also management costs of the underlying investment, which can range anywhere from 0.3% to 0.61%.
All of these fees stack up heavily, especially when you consider some of the most popular ETFs in the world are charging a measly 0.03-0.05% on any amount of cash.
- It is a straight-forward app which strips away most of the complex narrative of the investing world, so that most new investors should be able to get to grips with everything in the app without any complicated terminology or complex charts/tables.
- You can target investments which speak directly to your personal values and beliefs. This means you can effectively make a financial gain for your future, while also working towards owning a part of a company making a real difference to the future of the planet.
- The user-interface of CIRCA5000 is very easy to use. This is the case for most apps these days, as companies realise that without a simple UI, they cannot hope to be successful. Setting up an account and beginning your investing journey has never been so simple
- Depending on your level of investing, £1 a month could be quite a large fee. If you have quite a small investment pot (say, £100) then the negative impact on your returns is quite high, especially compared to investing in some ultra-cheap ETFs
- There’s a lack of education within the platform, and it feels as though CIRCA5000 is just trying to make you a customer, rather than an educated investor at certain points.
- Due to the lack of education, you would think there would be some recommendations or advice? But generally you’re left to choose a portfolio from a menu, with very little guidance.
- This is a mobile-only platform. Some investors may love this…some may hate it
There are numerous apps growing in this marketplace, which are all designed to make investing as simple as possible and attract the masses. In recent times we’ve really seen an increase in the trend of ‘normal people’ like you and I gravitating towards the world of investing and taking care of our personal finances. One of CIRCA5000’s closest viable alternatives is called Plum (see the review here), which is essentially targeted as being a savings and investments app.