Home Mutual Funds Which Is Best for You? In 2024

Which Is Best for You? In 2024

by admin



Category Fundrise Yieldstreet
Platform Fees 0.15% None
Management Fees Income Real Estate Fund and all eREITs: 0.85% Innovation Fund: 1.85%  1% to 4%, depending on the offering
Investment-Specific Fees Each offering will have specific expenses Charged by investment sponsors, depends on the deal
Other Fees Fundrise Pro: $10/month or $99/year Alternative Income Fund management fee: 1.5%

Final Verdict

A direct comparison of fees between Fundrise and Yieldstreet would definitely put Fundrise on top if simply based on overall fees. However, we need to take a more nuanced look than that. Fundrise investment opportunities are open to both accredited and non-accredited investors. Yieldstreet only offers one investment opportunity to non-accredited investors—the Alternative Income Fund, 1.5% fee—with all other investment opportunities being offered to accredited investors only, with fees ranging from 1% to 4%. When making a direct comparison of the non-accredited investment options, the companies are actually very competitive, with Fundrise fees ranging from 0.15% to 1.85% and Yieldstreet coming in at 1.5%. 

Transparency

Fundrise is very transparent regarding liquidity, fees, and reporting options. Even though investing with Fundrise should be considered a long-term investment, the company does offer options for liquidity, some without penalties. With the flat-fee structure for management fees for all investors and the additional fee to upgrade to Fundrise Pro, and only a few investment-specific fees, it is fairly easy for an investor to figure out exact fees. Fundrise investors also can expect to receive regular updates and communications:

  • Information on new additions to their portfolios
  • Quarterly investor letters
  • Annual tax information
  • Investment insights delivered monthly

Yieldstreet is quite transparent regarding fees and reporting options for clients. However, the investment opportunities that the company offers do not provide liquidity. Most of Yieldstreet’s investment opportunities have a five-year lock-up period, with only the Alternative Income Fund allowing for limited liquidity opportunities on a quarterly basis. While the fee structure is not a flat fee for all investments offered, each opportunity clearly shows the fees involved with that specific opportunity. 

Reporting options include:

  • Monthly statements
  • Annual tax reports
  • Account servicing
  • General and periodic investment updates 

Final Verdict

Both Fundrise and Yieldstreet are very comparable when it comes to transparency regarding fees and reporting options. Fundrise does offer investors much greater options for liquidity with only 60-day holding periods on all investments, as compared to Yieldstreet’s much longer holding period of five years on many of their investments. That being said, Yieldstreet does offer limited liquidity for investors in the Alternative Income Fund on a quarterly basis, which is somewhat comparable to Fundrise.

Liquidity

Investing at Fundrise is intended to be a long-term investment; however, there are options for liquidity. In order to redeem shares, the investor must submit a liquidation request. All liquidation requests are reviewed at the end of the quarter for the Flagship Fund, Income Fund, Innovation Fund, and eREITs. Liquidation requests for the Fundrise eFund are reviewed at the end of the month after a 60-day waiting period. There are no penalties for liquidating shares from the Flagship Fund, the Income Fund, or the Innovation Fund; however, any eREIT or eFund share withdrawals are subject to a penalty if held for less than five years. Currently, over 385,000 investors are using the Fundrise platform to invest. Investors have the freedom to invest without restrictions, except for some eREITs and eFunds that do have a cap of no more than 10% of your gross income or net worth.

Most of Yieldstreet’s investment opportunities require a minimum holding period of just six months, but some products have commitments that extend up to several years. Each investment has the expected holding period disclosed on the investment-specific web page. Potential investors should view their investment as a long-term investment. The Alternative Income Fund, however, does offer limited liquidity to the investors. The number of shares available for repurchase is limited to 20% of outstanding shares in the previous calendar year, or 5% each quarter. If the number of shares submitted for liquidation exceeds that amount, shares will be repurchased on a pro-rata basis. Yieldstreet currently has over 450,000 investors.

Final Verdict

While the investments offered by both Fundrise and Yieldstreet are considered long-term investment opportunities, Fundrise is the clear choice for investors who want to invest for the short term or need access to liquidity. Fundrise offers several funds that offer liquidation options, whereas Yieldstreet only offers one investment opportunity with early liquidation options.

Investment Selection

Fundrise has investors go through a questionnaire during account setup to help determine goals and investment strategy. Based on these answers, investors can choose from the following list of curated funds to meet their investing goals: 

  • Supplemental Income: Private credit
  • Balanced Investing: Private credit and real estate
  • Long-Term Growth: Real estate 
  • Innovation: Portfolio of private technology companies

While Fundrise’s Supplemental Income, Balanced Investing, and Long-Term Growth funds focus on real estate investing, the company’s venture capital-focused fund (Innovation Fund) offers investors opportunities for growth beyond just real estate. The Innovation Fund is comprised of:

  • Modern data infrastructure
  • Financial technology
  • Artificial intelligence and machine learning
  • Development operations 

Yieldstreet offers extensive options for investors. In addition to real estate investment opportunities, investors can elect to invest in:

  • Private credit
  • Art 
  • Legal finance
  • Private equity
  • Venture capital
  • Multi-asset class funds
  • Short-term notes
  • Structured notes
  • Diversified funds

Investors can also choose which type of investment strategy they want and select the options that meet that goal:

  • Growth: Real estate, venture capital, private equity, art, legal finance
  • Income: Real estate, private credit, short-term notes, structured notes, art, legal finance
  • Balanced: Real estate, private equity, private credit

Final Verdict

Within the real estate crowdfunding industry, Yieldstreet certainly stands out in the category of investment selection, offering more asset classes than any other platform. Investors looking for options in addition to real estate investing will find the aggregation of choice quite favorable.

When considering real estate-specific options, however, Fundrise offers more opportunity to investors regarding sectors and domains, giving investors options for commercial, industrial, and residential projects. Yieldstreet only offers commercial and industrial real estate options. 

Educational Offerings

Fundrise offers several useful educational resources:

  • Help Center: Investors can find an array of general information about the company, investments, getting started, types of accounts, and more.
  • Articles: Fundrise publishes its informational letters to investors, as well as offering news and investing education. 
  • Podcast: Fundrise also offers a podcast, Onward, featuring CEO Ben Miller and guests.
  • YouTube: Many of the early videos appear to be short informational videos. However, over the past year, the Fundrise YouTube channel has focused on presenting longer-form discussion videos.

Yieldstreet has an education tab, with a link to “Insight and Education,” which offers articles in several categories:

  • Investing fundamentals
  • Asset classes
  • Market Insights
  • Product updates
  • Yieldstreet performance

There is also a link to the Help Center for Yieldstreet investors with frequently asked questions, account setup help, current investment opportunities, and more. Yieldstreet does also have a YouTube channel; however, there are no recent videos (most are from nearly a year ago). That being said, many of the videos appear to cover general topics that provide education or information that may help investors with their decision-making.

Final Verdict

Fundrise and Yieldstreet provide similar educational resources to their investors. Both feature a Help Center on their website, along with a blog featuring articles and videos on an expansive range of investing topics. Fundrise does edge out Yieldstreet in this category slightly, though, with its educational podcast.

Customer Support 

Fundrise has limited access when it comes to customer support. On Fundrise’s website, investors are able to submit a question or issue via a contact form or click on an orange chat button on the bottom right of the screen. The chatbot is not live and only has the ability to provide pre-written answers based on the user query and keywords. Fundrise also has a social media presence on Facebook, Instagram, LinkedIn, and X, where investors can send direct messages to them. However, no customer service phone number is available for direct calls.

Yieldstreet offers investors several ways to reach out with questions or concerns: phone, submitting a question via the chatbot, email, or direct messaging through social media accounts (Facebook, Instagram, LinkedIn, and X). While there is a chatbot, it gives predetermined answers or if it can’t provide an answer, will direct investor questions to a team member for further assistance.

Compare Customer Support Offerings

Category Fundrise Yieldstreet
Phone No Yes, 844-943-5378
Contact Form Yes No
Email Yes, contact@fundrise.com Yes, support@yieldstreet.com
Live Chat No Yes

Final Verdict

Yieldstreet definitely offers a higher level of customer support with more direct ways of accessing your answers—via phone or live chat. While Fundrise is in line with many industry competitors by only offering email or indirect access to support, Yieldstreet stands out in this area. 

The Bottom Line

When it comes to deciding which company is best for your investment needs, it depends on the type of investor you are. If you don’t have much money to invest or are a beginner investor, Fundrise may be the better option for you. With a low investment minimum of $10, low fees,  liquidity options, and curated funds to choose from that match your investing style, investors will find it easy to get started in the real estate crowdfunding space. 

High-net-worth individuals may find Yieldstreet to be a more suitable choice, as most offerings are only open to accredited investors, the minimum investment amount is $10,000, and most investments are expected to be held for several years.

Is Fundrise Legit?

Yes. Fundrise was founded in 2012 and is headquartered in Washington, D.C. The company has over 385,000 active investors, $7 billion total investment portfolio value, and $361 million net dividends earned by investors. Three of the funds are registered with the SEC, as defined by the Securities Act of 1940, while 10 funds are exempt from registration.

Can You Lose Money From Fundrise? 

Yes, as with any investment, whether it be in stocks, fixed income, currencies, commodities, or real estate, investors can lose money. Potential investors can review Fundrise’s historical returns and decide for themselves if it is a good company to invest with or not. Fundrise provides charts and graphs on its website so investors can easily see the investment performance of the company since 2017.

Is Yieldstreet Legit?

Yes. Yieldstreet was founded in New York City in 2015, has over 450,000 investors, has invested a total of $3.9 billion, and has been able to earn 9.7% net annualized returns since inception.

Is Yieldstreet a Good Investment?

Investors can view the historical data of Yieldstreet investments to see positive net annualized returns, payment history, and investment performance for each of its asset classes.  While overall returns at Yieldstreet since inception in 2015 are 9.6% before fees, past performance is no guarantee of future returns. Before investing with Yieldstreet, Investors must also determine if they have the capital to tie up over long holding periods.

How We Review Real Estate Crowdfunding Platforms

To evaluate and review real estate crowdfunding platforms, Investopedia’s team of researchers, data collectors, and industry experts spent nearly two months conducting in-depth industry research, company survey data collection, and hands-on evaluations of 19 companies. We grouped the 38 criteria that we collected, including investment selection and minimums, holding periods, and curated portfolios, into eight categories. We then scored these criteria and weighted the categories to determine which real estate crowdfunding platforms are best for both accredited and non-accredited investors.

  • Fees: 15%
  • Account Services: 15%
  • Investment Selection: 15%
  • Liquidity: 12.5% 
  • Transparency: 12.5%
  • Sectors and Domains: 12.5%
  • Customer Support and Usability: 10%
  • Educational Offerings: 7.5%

Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of real estate crowdfunding platforms. Read our full process for more information on how we review real estate crowdfunding platforms.

Source link

related posts

Leave a Comment