Everyone deserves to live the life they want and we believe Canadians should have easy access to tools that will help them achieve their financial goals. We also know it’s possible to build wealth if you invest early and often; but when it comes to investing, there’s a lot to take into account. From your personal financial situation and goals to your risk tolerance and time horizon, these factors should all be considered when determining which investment strategy is best for you, and revised from time to time to reflect changes in your life.
Similarly, as financial markets evolve and new investment opportunities become available, these changes can affect your overall investment strategy along with where and how much you invest.
Today’s financial markets aren’t the same as they were at the start of the COVID-19 pandemic, just like they aren’t the same as they were during the 2008 financial crisis. That’s why our portfolio managers are regularly reviewing our investment models and fund strategies to ensure they best reflect today’s markets.
Based on rigorous research and thoughtful feedback from our users, we’ve made select updates that are intended to provide you with competitive portfolios that can help you achieve your financial goals.
These updates include new names for all of our investment portfolios and refreshed investment strategies on select portfolios:
|New portfolio names||Previous portfolio names|
|Balanced Income (modified SRI portfolio)||Conservative-Moderate|
|Balanced (modified portfolio)||Moderate|
|Balanced Growth (modified portfolio)||Moderate-Agressive|
|Equity Growth (modified portfolio)||Agressive|
All our investment portfolios are made up of allocations to one or multiple investment funds. So, depending on your financial goals, risk tolerance and time horizon, the money in your portfolio will be allocated to one or a combination of investment funds that meet your specific needs.
Moka portfolios are made up of four different investment funds to meet the various needs and goals of our members. In this case, the Moka Money Market Fund and Moka Fixed Income ETF Fund are staying the same while the Moka Equity ETF Fund and Moka SRI Fund will see two main changes that will affect the portfolios indicated above specifically:
1) An increased exposure to US stocks
In an effort to give you access to a broader range of sectors and industries, we’ve increased the funds’ exposure to US stocks by adding exchange-traded funds (ETFs) such as the S&P Total Market Index. By making this change, you could now have a bigger stake in companies like Apple, Alphabet, Microsoft and Tesla.
2) The addition of cryptocurrency
We’ve heard you loud and clear, and with the growing adoption of cryptocurrency as a legitimate investment asset, we decided now was the time to add digital currencies to our funds. The updated funds now include a 5% total allocation split evenly between exchange-traded funds (ETFs) that track Bitcoin and Ethereum. Given the small percentage allocated to cryptocurrency in the fund overall, any downturns are expected to have minimal negative impact on returns—baby steps!
We selected Bitcoin and Ethereum specifically because they’re among the most popular and stable cryptocurrencies available. Though they can be volatile; they have outperformed other asset classes in recent years, with Bitcoin hailed as the best performing asset of the last ten years.
Our portfolio managers will continue to review these and other digital currencies to reassess if and how cryptocurrencies and other asset classes can be factored in when creating and refreshing funds for our members.
What do these changes mean for you?
We’ve always strived to offer a variety of investment portfolios to our members that meet their personal needs and help them achieve their financial goals, so we’re thrilled to offer these updated portfolios.
For members with long term goals and who can tolerate some risk, we have shifted the composition of our highest-risk portfolio (now “Equity Growth”) to 95% equities and 5% cryptocurrency, split evenly between bitcoin and Ethereum.
If we look at the S&P 500’s historical performance as an example, a common benchmark in the investment industry, it’s had an average annual rate of return of 10% since its inception. To put that into perspective, if you were to invest $300 per month in the S&P 500, your investment could be worth just under $1.7 million after 40 years, if past results were to repeat themselves. Of course, there is no guarantee that will be the case. However, this example goes to show you the power of compounding returns!
So what do these changes mean for you? The short answer is: it all depends!
The portfolio you’re invested in can’t be changed by you directly. If you remember way back to when you first signed up with Moka, we asked you a series of questions that were intended to get a better understanding of your financial goals, risk tolerance, time horizon and overall picture of you as an investor. Based on your answers, your portfolio manager selected an investment portfolio that best suited your financial goals and personal situation. If, for example, you had a short term investment time horizon, as defined by the date you set on your goal, or were less willing to take risk, your investments were likely placed in a less risky portfolio, like the Balanced Income or Cautious Income portfolios.
The good news is that you can update your goals by revisiting the questionnaire in the app at any time—if anything has changed or changes in the future with regards to your personal situation and financial goals, they will likely reflect a change in your portfolio. So if our new updates don’t immediately affect your portfolio, there’s always a chance they will in the future.
To learn more about your current portfolio and investments, click here on your mobile device to open your Investment Policy Statement. If you’d like to revisit your onboarding answers, click here. Any changes you make will be reviewed by a portfolio manager, and may trigger a change in your investment model.
If you have any questions or concerns about these changes, you can always reach out to our portfolio managers at firstname.lastname@example.org.