Itransact is a robo-advisor headquartered in Johannesburg, South Africa that aims to provide investors with high-quality, low-cost investment products from South African and global asset managers and banks. It is focused on exchange-traded funds (ETFs) and offers more than 40 such options across cash, fixed income, property, and equity asset classes. Just answer some basic questions about your risk tolerance and financial goals, and the service will create a personalized investment portfolio for you.
Itransact only accepts funds in South African rands. American investors are more than welcome to open accounts with Itransact, but they must use a South African bank account in order to fund their investments.
Investors in South Africa or those with South African bank accounts; Beginners who don’t have a lot of capital to invest
Despite the worldly appeal and unique investment approach Itransact offers, investors must have a South African bank account to get started by investing rand, a fact that may deter some potential customers.
Pricing: How Much Does Itransact Cost?
|Option Name||Management Fee||Minimum Balance||Features|
|Investment Management||0.25%||5,000 rand||Auto rebalancing, independent investment plan changes, 24/7 online account|
|Portfolio Administration||0.35% to 0.65%, depending on account balance||5,000 rand||Auto rebalancing, independent investment plan changes, 24/7 online account|
Itransact has a flat annual fee on all invested amounts of 0.25% for investment management.
Then for portfolio administration costs, there are two fee structures based on your balance. For balances of 5,000 rand or less, the fee consists of 0.65% of your investments. For balances between 5,001 rand and 1,000,000 rand, the fee lands at 0.50%. Any balances above 1,000,001 rand see a fee of 0.35%.
Before you sign up, you will want to ask exactly what fees you will be charged for certain transactions and trades.
Itransact's Investing Strategy
Itransact works entirely online and creates and manages your investment portfolios through professionally created algorithms. Once you answer questions about your investment goals and before you even sign up officially, you’ll be able to see a graph showing you your expected returns with these algorithms, depending on the capital you plan to invest and market performance.
It’s through these algorithms that Itransact can manage and adjust your portfolios as necessary. They recognize when an investment is not performing up to standards. Then they can make adjustments to always ensure your portfolios are optimized according to your goals. It’s your investment goals and financial standing that help determine your portfolios.
Once Itransact knows you and your goals, it will create a diversified and personalized investment strategy. Your portfolios will contain a variety of ETFs, all with low costs to you. Itransact creates portfolios with ETFs that track domestic money, bond, property, domestic equity and international equity markets. Capital is distributed throughout your portfolio by first selecting the ETFs and then allocating actual assets to those ETFs.
Itransact uses only index ETFs in its portfolios. This is done, according to the company’s website, to ensure it uses “the best raw ingredients” to create a new and unique profile. Doing so also allows for a diversified investment experience. Having a diversified portfolio is crucial for avoiding a complete crash of your assets. That way, if one type of investment in the market drops, your other investments will remain safe.
To determine which ETFs will go into a portfolio, Itransact starts by looking at each index ETF to see its historical prices and total returns. Itransact algorithms put each ETF into one of six or seven unique areas of the market, each one different from the next. From each area, the ETFs with the lowest risk and highest returns are chosen for a portfolio. This process ensures your portfolio will represent global equities, domestic equities, domestic property, domestic bonds and domestic money.
Itransact seeks to provide each investor with five risk-managed portfolios, ranging from low to high risk. This allows the investor to be conservative in one portfolio and aggressive in another. It always depends on the investor to make the final decision on each portfolio’s time length.
- Individual brokerage account
- General savings
- 529 college savings
- 401(k) rollover
Itransact largely prides itself on offering its customers a low-cost investing solution. Whether you sign up for investment management or portfolio administration or both, you’ll see some pretty low rates. This means that you get to keep more of your investment returns than you would with many of Itransact’s competitors. Itransact does this partly by investing in ETFs that cost much less. That way, your investments don’t get hit with high trading fees. Itransact never charges more than 1% of your returns, meaning you get to keep what your investments earn.
Itransact also promises to be transparent with its clients. For starters, there are no hidden fees. That way you know exactly what you’ll be paying and exactly what fees you might see. Itransact also maintains full transparency for its ETF portfolios. by publishing the shares of each ETF index daily. Furthermore, Itransact will work to help you understand your investments. This will let you know what you’re investing in and what your returns are, both expected and real.
A key part of investing with Itransact is that the people behind it want to make it a simple and positive experience for all their customers. By investing in low-cost ETFs, you can avoid some of the high expenses of investing. Plus, given the simplicity and straightforward approach of Itransact, you can enjoy a no-frills investing and progress-tracking process.
Lastly, you will have constant online access to your portfolio. There, you can reassess your goals, see how your investments are performing, contact a real advisor and more. You don’t have to rebalance your account, either, since Itransact will automatically do that for you. You can also download your quarterly portfolio statements and annual tax statements. You can easily do all this on your smartphone, too, with Mobi.
Who Itransact Is For
Itransact promises transparency, simplicity and low costs to its customers. With transparency, you can better understand what you’re actually investing in. Not only will you know which ETFs are in your portfolio, but you’ll also be able to track how your investments are performing and how that squares with your financial goals.
Investing can get confusing and overwhelming, especially for beginners, and making it simple to understand isn’t an easy task. But Itransact seeks to do exactly that. Getting started is a simple process, and you have the convenience of online and mobile access to your investment portfolios at any time.
Itransact doesn’t charge astronomically high fees or require a large minimum for its services. This opens the door for investors who don’t already have thousands of dollars in assets or cash. You can technically open an account with zero money in the balance, but if you want to start investing, you need to input at least 5,000 rand.
As a robo-advisor, Itransact is entirely online. This means that your portfolio is created, managed and rebalanced by Itransact’s algorithms. You can also employ a financial advisor outside of Itransact who can work with you and Itransact to manage your portfolios. In this sense, Itransact allows you to forgo the costs of meeting with a financial advisor in person, although you may still be charged a fee by the advisor.
Lastly, as a South African company, Itransact only accepts funds in South African rands. American investors are able to open accounts with Itransact, but they must have a South African bank account in order to fund their investments.
- Automatic rebalancing and daily monitoring
- Adjust your portfolio based on your changing investment needs
- 24/7 online access
- Tax-loss harvesting
- Human advising
How Itransact Works
Just as Itransact’s website states, opening an account is “as easy as 1...2...3... GO!” You simply have to click the "GO" button on the website to head to the first step towards opening an account. Here, you will have to answer a series of questions. For starters, you need to choose what your risk profile is. If you’re unsure, you can easily fill out a questionnaire to determine your risk profile.
You’ll then have to specify what you’re investing for, whether for retirement, a big purchase, a home or just wealth growth. Set your lump sum deposit and your automatic monthly contribution amounts. Note that when you make your deposit, there is no minimum since you can start with zero rand. However, you have to deposit at least 5,000 rand to start investing.
Once you click “Calculate,” you will be shown a graph that predicts your investment returns according to the information you entered. You can change the numbers and goals to see how that affects the graph. While informative, the graph can be slightly confusing to read. On this page, should you choose to sign up with Itransact, you can click a “Buy Now” button.
To continue with the process, you must provide personal information on your application. This includes copies of your ID or Passport, proof of address, proof of bank accounts (like a check or stamped bank statement), phone numbers and addresses. If you make a lump sum deposit (of 5,000 rand or more), you will also need to provide proof of payment. Don’t forget that your funds may only come as rands through a South African bank account. No other currency is accepted at the moment.
What's the Catch?
As a South African company, Itransact trades in the South African market sphere. This may certainly deter a number of investors who aren’t interested in the South African market.
Another downside to investing with Itransact could be the balance tiers. To snag the lowest fee rate of 0.35% you would need a hefty account balance of at least 1,000,001 rand ($76,800.) However, while many robo-advisors require lower minimums, if at all, they still often charge a rate higher than 0.35%.
Competition: How Itransact Stacks Up?
Of course, Itransact isn’t the only robo-advisor out there, especially as technology continues to take over more and more aspects of finance. Each robo-advisor will offer you something different, though. It’s entirely up to you which robo-advisor you end up working with. When comparing a few, you’ll want to check out their rates, strategies, costs and minimums. When comparing other robo-advisors, keep in mind that Itransact only accepts funds in rands and you must have a South African bank account.
One Itransact competitor is Fidelity Go, the robo-advisor arm of Fidelity. Unlike Itransact, Fidelity Go creates portfolios with more than just ETFs, including mutual funds and municipal bonds as well. The exact mix of your personal portfolio will depend on your risk profile and your investment goals. While you can’t trade individual investments on your own, you can call a Fidelity Go professional to set restrictions and actions. This is a service that Itransact doesn’t quite offer, although you do have the ability to contact someone at Itransact pretty easily.
Fidelity Go does offer its services at a lower cost than Itransact. The gross advisory fee for Fidelity Go lands at 0.35% for all balance tiers. This matches with the middle tier fee rate of Itransact, which requires a pretty high balance and thus puts the best product rates out of reach of lower-tier investors. However, with Fidelity Go, you will need to start with at least $5,000. You will also see a few other fees that usually amount to an extra 0.05%, totaling at 0.40% which is still a relatively low fee. Luckily, both Itransact and Fidelity Go ensure that your portfolio is filled with low-cost funds.
Wealthfront, another robo-advisor, also charges a 0.25% management fee. You do need to deposit at least $500 to open a Wealthfront account.
Wealthfront also won’t charge you to purchase ETFs, although ETFs do come with their own fees that you still have to pay. As with most robo-advisors, Wealthfront will also take into account your willingness to take on risk and your investing goals to create the best profiles for you. In fact, Wealthfront will create two profiles, one for a taxable account and the other for a retirement account. Then you can choose which one you feel most comfortable moving forward with.
Bottom Line: Should You Use Itransact?
If the idea of working with a robo-advisor sounds appealing to you, then an account with Itransact could be a solid place to start. Don’t forget that you’ll need to have a South African bank account and will need rand to start investing. Itransact charges some pretty low fees compared to their competitors. Itransact is a robo-advisor well worth trusting since it offers transparency, low costs and simplicity.