What Is Stash?
Stash is a thematic microinvesting platform. It is part of a new wave of highly accessible financial trading platforms that are built on the concept of fractional shares.
Basically, using fractional shares you can invest very small amounts of money and still get a piece of the pie, even if shares of a stock or ETF are worth 10 or even 100 times what you invested.
Stash is simplified, easy to use, and a great fit for new investors, casual investors, and young investors.
- Simplified theme selection
- Balances ease of use with control over your portfolio
- Low minimum balance (get started with just $5)
- Recurring automatic deposits to grow your portfolio
- No fees for investors under the age of 25
- Fees (on a percentage-of-portfolio basis) are high for small balances
- Small selection of individual stocks
- Not a trading platform (may not be a disadvantage for new/casual investors)
What Is Thematic Investing?
Stash isn’t a robo advisor, but it is an extremely simplified guided investing experience.
Thematic investing is the core of Stash’s product offering. Instead of building your portfolio from the ground up, Stash recommends “investing themes,” or collections of ETFs based on your investment preferences, personal interests, and beliefs.
These ETFs are not proprietary financial products owned or managed by Stash—they are normal ETFs that are actively traded and managed by companies such as Vanguard and iShares. Instead of being a trading platform where investors pick different investments based on a strategy or objectives, the increasing thematic investing trend reflects investments based on themes.
Stash themes reflect what investors find important. Investing themes are as varied as the investors who believe in them: artificial intelligence, reduced carbon emissions, social responsibility, women-led enterprises, and more.
Once your account is set up, you are guided through a series of questions designed to evaluate your risk tolerance. Once your risk profile is established (ranging from conservative to aggressive), you are presented with different investment themes that are consistent with that risk profile.
Investing themes are ETFs.
They are renamed (in title only—the ticker symbol and other details are still available) and are organized into collections. At time of writing, Stash offers exposure to 40+ ETFs through their curated collection of themes.
Themes are simply ETFs that have been renamed, curated into collections, and matched with investors based on their risk tolerance and beliefs.
In response to user feedback, Stash has also started allowing users to buy and sell about 70 individual stocks, also available based on the fractional shares model.
Investors are guided through the theme (ETF) selection process by answering a series of questions regarding what they believe, what they like, what they want, and companies they believe in or would like to support.
For example, the Stash theme “American Innovators” is the Vanguard Information Technology ETF (VGT). The “Combat Carbon” theme is the iShares MSCI ACWI Low Carbon Target ETF (CRBN), and so on.
A selected screen capture of a Stash theme listing.
How Much Does It Cost?
The core thematic investing components of Stash cost a flat fee of $1 per month for accounts under $5,000. The first month is free, and after the five-grand mark, Stash costs are .25 percent of assets annually.
The big question: is a dollar a month a lot or a little?
The answer depends on your activity on the platform. New users have to put at least five dollars into their account to get started. After that, Stash recommends setting automatic deposits to $10 every two weeks or $20 monthly.
Let’s follow that through with an example. The example below assumes a new user goes with the biweekly ten-dollar deposit.
Open your Stash account………………………………………….$5
Two automatic deposits…………………………………………….$20
No fee for the first month………………………………………….$0
Two automatic deposits…………………………………………….$20
First dollar fee……………………………………………………….......$1
Total invested after two months….…............$45
Total fees after two months….........................$1
After two months of using the platform, upfront fees total just a dollar (this doesn’t include ETF management fees that are deducted from returns). Compare this to our initial investment of $45 (not counting investment returns) and a dollar is about 2 percent of our assets.
Is 2 percent worth what Stash provides?
That depends on your investor profile. If you are looking for low-maintenance investing that is set on autopilot, or if you are a new/casual investor, it can be worth it. If you are a serious investor, you can do better with more control (more on that in a moment).
What Else Does Stash Offer?
Thematic investing is the core Stash offering, but the microinvesting platform has a few other product offerings.
This is Stash’s retirement account offering.
Stash Retire customers can choose between traditional IRA and Roth IRA accounts with the ultra-low $5 minimum that Stash customers expect for a flat fee of $2 per month. As with normal Stash investment accounts, once the total assets in a Stash Retire account reach $5,000 the management fee changes to .25 percent of assets.
Stash Custodial is a unique account type that investors can use to give a child in their lives a head start on financial success. Custodial accounts can be opened for anyone under the age of 18, and when that person reaches the age of majority the money transfers to their control.
When it comes to Custodial accounts, the more the merrier. Your first Stash Custodial account is billed at the standard Stash rate of a dollar per month, and subsequent accounts are billed at a half rate: a dollar per account every two months.
Note: Stash accounts are fee-free for investors under the age of 25, so that means that even though you might not be a minor with a generous benefactor, if you’re a college student or a young investor you can get a head start on your financial future without having to pay the monthly dollar and two-dollar fees for Stash Invest and Stash Retire, respectively.
If the number of new digital banking services is any indication, your favorite fintech (financial technology) provider is also aiming to be your bank. At time of writing, the Stash Banking service has yet to launch, but it shows a lot of potential to be a highly competitive offering in the digital banking space.
Key features include zero setup, monthly, or overdraft fees, no account minimums, and free access to over 19,000 ATMs across the country. At this time, the more interesting features of Stash Banking are only hinted at, but they seem even more compelling reasons to see if Stash Banking is worth the wait.
The current Stash Banking info page doesn’t go into detail regarding how the more interesting aspects of the service work, but they seem like the real reason that Stash customers should make the switch...once the service goes live, that is.
So, What’s the Verdict?
Stash is great for college students
No fees for investors under 25 and the flexibility of the microinvesting model make Stash particularly appealing for college students.
Additionally, many younger people identify with the concept of thematic investing—using your investments to make a difference in the world—and the Stash process is just plain top-to-bottom simple.
Stash is a great way to invest if you struggle to save money
Studies (and personal experience) have shown that saving is easier when it is set on autopilot.
Automatic deposits come to the rescue in this regard, and because the platform is built on the concept of fractional shares, every cent that ends up in your account gets put to work for you.
This automatic deposit feature also means that casual investors or others who are looking for a low-maintenance, simplified investing experience will enjoy the platform’s simplified tools and ease of use.
Stash isn’t a good fit for serious self-directed investors
The Stash platform isn’t a robo advisor and it isn’t a trading platform. It also provides exposure to a limited number of equities; remember that “themes” are about 40 ETFs, and the individual stocks that investors can choose from consist of fractional shares of about 70 companies.
If you’re in the market to build your portfolio the way you want to, that’s really restrictive.
Plus, because Stash isn’t a trading platform, your trades don’t necessarily execute right away. It is very possible that your trades will be queued and execution will be postponed. Serious investors may be frustrated with the lack of control over transaction price and may be better served with a purpose-built trading platform (of which there are many).
The Bottom Line
When it comes to simplified investing, Stash has a unique angle in an increasingly crowded marketplace. It proves easy to use and easy to understand.
The platform is built for the long haul. With custodial accounts and no fees for investors under the age of 25, Stash has clearly homed in on their target market, but that doesn’t mean that other investors—especially casual investors or those who struggle to save up funds to invest—can’t benefit from the platform's simplicity and automated investing tools.
Interested in trying Stash?