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Smart Invest FAQs

All your questions about Chaka Smart Invest answered and explained in-depth
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Written by Bode
Updated 10 months ago

Intro to Smart Invest


What is Smart Invest?
Think of it as an investment advisor in your pocket. You invest your capital into diversified portfolios to meet your long-term investment goals - no trading or investment experience required.

How does it work?
The product works in three simple steps:

  1. You take a simple suitability test that allows us to understand your goals and risk profile
  2. Our wealth management experts recommend a portfolio that matches your goals 
  3. You fund your portfolio and watch your money work!

However, we do more than recommend portfolios. Our wealth management experts monitor and maintain your specific portfolio allocation through auto-rebalancing.

How do I get verified on Smart Invest? As an existing Chaka stock user, do I get verified twice?
All globally verified Chaka users can skip the verification process.

If you are not verified to trade global stocks, you can do so by 

1. Sign up/in to the Chaka app
2. Navigate to your account settings 
3. Start global verification 
4. Enter your NUBAN/BVN 
5. Confirm your personal details 
6. Answer verification questions
7. Upload your Proof of ID (Please note NIMC slip is not accepted)
8. Upload your Proof of Address

Do I need to download a separate app to access Smart Invest?
No, Smart Invest is accessible on your current Chaka app. Tap the button circled in the image below to access it. 


Funding, Redemption and Fees 

How do funding and redemptions work?
When you fund your advisory wallet, your funds are automatically invested in the portfolio of your choice. Similarly, when you redeem your investment, we sell out from your portfolio and deposit the equivalent amount in Naira in the bank account you have provided. 

How do i fund my Smart Invest wallet?

There are two ways to fund at this time:

For users that can access Smart invest on the Chaka app: Please login to your Chaka app and follow the steps below:

For users that cannot access Smart invest on the Chaka app (most current Chaka users will fall into this category):

Your funding details will be shared to your email after you join the Smart Invest waitlist and take the investment questionnaire. (Click here to join waitlist and take the test)

Please make a transfer/deposit directly into the account to fund your Smart Invest wallet.

Can I move funds from Chaka Self-Trade wallet to Smart Invest wallet
No, you cannot transfer funds at this time. 

Am I downloading a separate Advisory app

No, Smart Invest is accessible on your current Chaka app. Tap the button circled in the image below to access it. (Coming soon to your Chaka app)

Is there a maturity plan or lock-in period?
No, your money is available to withdraw at any time. However, we recommend that you adopt a long term mindset for optimal results.

How much does it cost?
Chaka charges a wrap fee of 1.7% of your account per year. No commissions, no surprises.

This fee is billed at the end of each month on the average account value of your portfolio for the month.

So let's say you started investing $100, you will pay us around 14c per month for our service, monitoring and rebalancing included!

Are there any rebalancing, account maintenance or closing fees?
No, you don't pay any additional fees. It's all included in your plan and part of the management fee.



Investing

What asset classes do you invest in?
The beauty of this product is that all portfolios are globally diversified. We do not invest in single stocks like Apple or Tesla so this means that if the price of a single stock is down, your portfolio is not affected. Instead, your portfolio consists of the best-in-class ETFs in the market. Your portfolio would give you adequate exposure to bonds, real estate, US and international equities to protect against volatility in any one sector or market. 

We invest in the following asset classes: Cash, US Government Bonds, International Government Bonds, US IG Corporate Bonds, International IG Corporates, US Developed Equities, International Developed Equities, Emerging Market Equities, Global Real Estate.

What is an ETF?
An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as a stock index or bond index. ETFs can be attractive as investments because of their low costs, tax efficiency, and stock-like features.

Can I view the Individual stocks and assets in the portfolio selected for me?
You can view your equities, bonds and real estate portfolio performance at any time. 

What is auto rebalancing?
Automatic rebalancing is Chaka’s method of maintaining your specific portfolio allocation. Market fluctuations may cause some of the securities in your portfolio to appreciate or depreciate in value. When this occurs, we use automatic rebalancing to bring your portfolio back to its specified allocation. This ensures that the securities in your investment account are proportioned correctly.

How often will a portfolio be rebalanced and what is portfolio rebalancing all about?
Portfolios are rebalanced at least once every quarter. Each quarter your portfolio is assessed to check that your asset mix does not exceed the threshold for your portfolio type. If any asset is above this threshold we will automatically sell out of the position and spread the proceeds across your portfolio so that it maintains the desired mix. 

Can I reinvest my dividends?
Yes, dividends are automatically reinvested through our Dividend Reinvestment Program (DRIP). Dividend reinvestment means these cash pay-outs are automatically reinvested to purchase additional shares. The main advantage of reinvesting dividends is maximizing the benefits of compound interest instead of leaving cash idle in your account.

Can a market crash take my account to a negative value?
Returns change according to market conditions but the real winners are investors that stay the course and reap the rewards of compounding. 

What returns can I expect?
This is one of the most common questions we receive. Your portfolio return depends on the portfolio type as well as the time frame of investment. Generally the more risky the portfolio the more volatility (both positive and negative). 


Portfolio returns also depend on shocks and market sentiment.
That's why we advice that instead of focusing solely on returns, you should focus on what you can control:

Costs: Keep your costs low. A lot of traditional investment advisors have expensive and hidden fee structures. We don't. 

Time horizon: The longer the better. Have a medium-long time horizon (5-10+ years) and stick to your plan.

Your risk (and the emotions that come with it): Don't try to time the market as study after study shows that it's impossible to do that. Instead, find a suitable risk profile and contribute regularly to your plan to benefit from dollar-cost averaging. When you invest fixed sums at regular intervals, you pick up more units when the prices are low and fewer units when the prices are high. If you need to talk to someone, our advisors will be available to help. 

Can I retake my investment questionnaire after I invest ?
The investment questionnaire is designed to match you with a profile that suites your investment goals. Once you take the questionnaire, we recommend a portfolio we think is suitable for you. You’ll also get the chance to see a summary of the portfolio before you select it. If you think another portfolio suite you, you have the option to retake the questionnaire. However, you will not be able to directly pick a portfolio at this time. 

Can I invest in multiple portfolios 
At the moment, you are only able to invest in one portfolio at a time. 

Can I change my portfolio after I get started? 
Portfolios are constructed to ensure you meet your investment goals. However, if you insist on changing your portfolios, please contact support@chaka.com and we will work you through the process.


Other Information

Is the Smart Invest portfolio insured like Chaka stocks?
Yes, all your dollar assets and funds on Chaka are SIPC-insured up to $500,000

Is Smart Invest Available for Local Stocks?
Portfolios are constructed to give you a mix of the best assets from all over the world. This includes Emerging Market Equities, some of which may be Nigerian stocks, or indexed to the Nigerian economy. 

What is compound interest? And why does it matter?
It is the process of earning interest on your interest. Thanks to compounding, someone who is starting to save in their 20s is going to have significantly more money than someone who started to save the exact same amount in their 30s.

Here’s an example to explain further:

Take two friends: One starts investing $5,000 a year at the age of 25, and the other starts investing the same amount at the age of 35.

They both retire at the age of 65. The one who started earlier would have a net amount of approximately $1 million*, while the one who started at 35 would have a net amount of approximately $500,000*. This $50,000 invested over the years ($5,000 x 10 years) will translate to a difference of approximately $500,000 between the two.

*Assumes $5,000 annual contribution, 7% annual return.

Ready to get started? Click here to get early access.

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