Blossom FAQs

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Investing with Blossom

Does Blossom operate under an Australian Financial Services Licence (AFSL)?

Yes, BlossomApp Pty Limited ABN 74 644 216 151 is a Corporate Authorised Representative (CAR No 1284228) of Gleneagle Asset Management Limited (ABN 29 103 162 278 AFSL 226199, who is the Responsible Entity of the Fund.

What does ethical investing mean for Blossom?

Blossom’s mission is to leave your savings and the environment much better than we found them. Not only is Blossom good for your savings, it’s good for your conscience. No coal, no oil, no dirty investments. At Blossom, we believe your money can do good as it grows. Learn more about our ESG expert, Dr Kylie, and how she keeps our investment team accountable here.

What is the Product Disclosure Statement (PDS)?

A product disclosure statement (PDS) is an important document that contains information about Blossom including the product’s key features and benefits, significant risks, and the complaints handling procedure (among other things).

You should read the PDS in full before deciding to open a Blossom account and start saving (in legal terms, paying to acquire interests in the Fund, hold your savings in your Account and whether to withdraw). Applications may only be made pursuant to the PDS. You can also find our PDS on our web, iOS or Android app.

You will receive a copy of the PDS (or get access to it) when you sign-up with Blossom. Later versions will be provided to you as well.

Who is the Blossom Fund managed by?

Fortlake Asset Management Limited ABN 30 643 640 939 is the liquidity manager, under the leadership of Dr Christian Baylis. Christian is a highly regarded Australian-based manager with broad experience across global fixed income and derivatives strategies, having worked previously at UBS Asset Management and the Reserve Bank of Australia (RBA). Christian has over 19 years’ experience in fixed income and holds a PhD in Econometrics.

Blossom is the Threshold Manager. For more information on the key service providers, please read the PDS.

Is the Blossom Fund audited?

Ernst & Young ABN 75 288 172 749 has been appointed by the Responsible Entity as the external auditor for the Blossom Fund.

What is the relationship between JP Morgan and Blossom?

The Blossom Fund’s bond portfolio is held by J.P. Morgan Securities LLC ABN 37 109 293 610 as custodian appointed by the Fund’s Responsible Entity. A custodian, appointed by the Responsible Entity, is responsible for holding and safeguarding investments owned on behalf of a fund.

Is investing in fixed income the same as investing in the stock market or ETFs?

No, fixed income is different from investing in the stock market or Exchange Traded Funds (ETFs).

It is broadly understood that fixed income carries lower risks than stocks or ETFs, are less volatile and offer more stable returns. This is because macroeconomic risks, like economic downturns and geopolitical events, have larger impacts on the stock market than on fixed income investments. This makes fixed income investing appeal to investors with a lower tolerance for risk.

Also, investing in the stock market is subject to the benefits and drawbacks of exchanges, such as regulatory controls, prices charged, exchange protections for certain misconduct by brokers, exchange technology, issuer disclosures and liquidity opportunities and rules.

What if the Blossom Fund makes less than the targeted returns for Blossom Save or Blossom Plus?

We will use our Threshold Management and Underwriting Agreement to help fund potential interim shortfalls of the Class of the Fund below its targeted return. Please note, the return is targeted and not guaranteed. Past performance and short-term performance of the Fund are no assurances of future performance of the Fund. For more information, please read the PDS in full.

What does investment grade mean?

The underlying investments of the Blossom Fund will be selected for being investment grade.

Ratings agencies such as Standard and Poors (S&P) and Moodys assess a bond’s likelihood to repay principal and interest and express this through a credit rating. Using the S&P rating scale as an example, a bond rated at the highest level of AAA is deemed to be highly likely to repay principal and interest in a timely manner and highly unlikely to default. Bonds rated BBB- and above are all considered investment grade, while bonds rated below BBB- are regarded as speculative.

The Blossom portfolio will maintain an average credit rating of investment grade and we note that there has never been a default of an Australian investment grade bond.

What is Blossom’s Threshold Management and Underwriting Agreement?

Blossom has a Threshold Management and Underwriting Agreement in place which makes us confident in our ability to continue to target fixed returns.

The Threshold Management and Underwriting Agreement states that when the Blossom Fund (on a Class by Class basis) outperforms the targeted return on an interim basis, the excess, after interim external fees are paid, will be paid to BlossomApp Pty Limited to help it (in its discretion) pay the Fund to fund any shortfall if the Class in the Blossom Fund returns less than the targeted return. Blossom can also use the Fund’s underwriter to help fund shortfalls (subject to limits, see the PDSs).

This is our secret sauce! It’s our clever strategy to ensure we can continue to target a fixed return. For more information, please read the PDSs.

Is there risk involved in my investment?

The Blossom Fund, like any fixed income fund, carries risk. Blossom targets a fixed return but does not guarantee the return. 

We have 5 main reasons why we are confident about our targeted returns: 

  1. The Blossom Fund has had 100% positive months since inception. This means that we’ve met our target return and posted it to customers every single day since launch.
  2. Experienced team - Blossom has partnered with an expert team with 21 years of experience in fixed income at UBS and Reserve Bank of Australia. 
  3. Fixed income investing - the underlying investments of the Fund will be in fixed income investments. This allows for a more predictable and reliable return than many other asset classes. Fixed income investing is exactly what it sounds like, investments that pay a 'fixed rate': corporate bonds, government bonds, mortgage-backed securities and more.
  4. If the Blossom Fund returns are below the targeted return (i.e. the Class in the Blossom Fund is underperforming), the threshold manager has the sole discretion to make payments to the Blossom Fund to meet the targeted return for that Class;
  5. Diversified strategy – the Blossom Fund has 500+ underlying investments. These investments have an average rating of investment grade, to maintain over time, an average portfolio rating of BBB. Investment grade bond defaults in Australia have been very rare. The strategy uses investing across multiple financial institutions and corporations, rather than having all the risk weighted to one institution. This creates a better diversified strategy.

Past performance is not indicative of future performance. For more information about our strategy and significant risks, please read our PDSs, TMDs and FAQs here.

What do you mean by savings & earnings?

Your account gives a simple, transparent way to show the value of your savings in your account before you withdraw. Any increases are shown as earnings. Savings (total value) and earnings (increases) are shown every business day based on unit prices for applications and redemptions. If you withdraw at any time, your income entitlements depend on legal requirements and operations for redemption processes so could be different from reported indicative savings but in the ordinary course they will be the same. Please see the PDS for further information on income, distributions, withdrawals, entitlements and displayed savings and earnings.

How does Blossom target a fixed p.a. Return?

Led by an expert team, Blossom uses a diversified and sophisticated strategy including (direct and indirect) investments in corporate and government bonds, mortgage-backed securities, cash and more. Through targeting investment grade and highly liquid instruments, experts decide where and how to spread the risk to achieve the highest possible return within the investment strategy. For more information on our targeted returns and strategy, please read the PDSs.

Is Blossom a bank?

No, Blossom is providing you access to fixed income investment returns through the Blossom Fund. For more information on fixed income, keep reading the FAQs below or read the PDS.

Is it a passive investing app?

Yes, Blossom provides an app that gives access to passive investing opportunities starting with the Blossom Fund. The Blossom Fund is a fixed income fund with a portfolio of cash, semi-government and government bonds, mortgage-backed securities and more. We believe it’s a healthier and fairer way to save. 

Why can’t I invest in fixed income investments myself? Why do I need Blossom?

It can be difficult to access fixed income investments on your own because:

  • There are few platforms providing individuals with access to fixed income investing
  • Fixed income investments are generally associated with very high minimum investment amounts
  • With fixed income investing, your funds can be locked up for long periods of time. You might have to wait a long time for the investment to end or find a buyer, outside any exchange (and generally you would get paid much less than you invested in these cases).

Our goal is to make savings and investing accessible for all. That’s why we’re bringing you access to returns from fixed income investments, a healthier way to save.

What is the difference between the Blossom Save and Blossom Plus features?

Blossom Save gives you freedom and flexibility whilst you save:

  • Target 5.95% p.a. returns on your savings. 
  • Minimum balance of $5.
  • Withdrawals processed business daily. 

Blossom Plus helps you reach towards your longer-term goals faster: 

  • Target 7.00% p.a. returns on your savings.
  • Minimum balance of $5,000. 
  • Withdrawals processed every 3 months. 

See Blossom Save and Blossom Plus sections in our FAQs for more details. 

What is my investment? What do I own?

Blossom works by allowing you to transfer money to pay for units in the Blossom Fund, which is a diversified portfolio of financial assets. The Blossom Fund is a unit trust, registered under the Corporations Act as a managed investment scheme. As a saver with Blossom, you won’t be holding individual assets but will be holding units in the Fund.

What is a fixed income fund?

Fixed income investing is an investment approach focused on preserving your capital. Common examples of fixed income products include government or corporate bonds, which can provide steady streams of income. The Blossom Fund invests (directly or indirectly) in a well-diversified portfolio of assets of this type. For more information on the portfolio, please read the PDS.

What is the difference between Blossom Save and Blossom Plus investment strategies?

For Blossom Save, the Blossom Fund Manager actively manages a diversified portfolio primarily consisting of high-quality corporate securities and focuses on delivering consistent income and inflation protection over time. 

Blossom Plus has been created to help your funds work even harder. As Blossom Plus withdrawals are processed on a quarterly basis as opposed to daily, Blossom’s Fund manager has more flexibility with regard to the investment strategies that can be used to boost the targeted return. The differences may include elements such as duration, complexity and appropriate increases in risk adjusted returns. 

What is the key difference in risk between Blossom Save and Blossom Plus?

Generally speaking, targeting a higher return for Blossom Plus can involve taking on relatively more risk. However, the Blossom Fund manager actively manages a diversified portfolio to adjust for this risk. Diversification is key to managing this increased risk, as it involves spreading investments across various assets, sectors and regions.  

As Blossom Plus withdrawals are processed on a quarterly basis as opposed to business daily, Blossom Fund’s manager has more flexibility to pursue diversified strategies aimed at boosting targeted returns. The goal remains to optimise returns while effectively managing risk, ensuring investors receive a stable and rewarding investment experience.