I’ve never been a fully committed Monzo customer; my account balance rarely exceeds £300, and I primarily use it for everyday spending such as dining out or small grocery shops. However, Monzo has recently rekindled my interest with their new offering: Monzo Investments.
This feature allows you to invest through either a Stocks & Shares ISA or a General Investment Account, with a very low entry point of just £1. Additionally, you can use the round-up feature, which cleverly invests your spare change.
The appeal of Monzo Investments lies in its seamless integration within its existing app. There’s no need to grapple with third-party registrations or tedious form-filling—it’s all conveniently accessible in one place.
Monzo Investments is powered by BlackRock, a heavyweight in the financial world. When you invest, your money goes into BlackRock funds. I will summarise one of these funds below but for those keen on understanding their investments, the Monzo App offers in-depth insights into these funds.
But who exactly is BlackRock? As the world’s largest asset management firm, BlackRock oversees trillions of dollars in investments. They’re particularly renowned for their extensive range of exchange-traded funds (ETFs) through iShares, and they wield considerable influence in global financial markets.
Through Monzo, you have the option to invest through three distinct investment strategies: Careful, Balanced, and Adventurous. Your choice depends on your risk tolerance. The Careful option, for instance, invests only about 20% in stocks, with the remainder in more stable bonds. The Balanced option ramps up to 66% in shares, while the Adventurous option goes all-in with 100% stock investment.
This tiered approach makes Monzo Investments an excellent gateway for those who want to dip their toes into investing without having to handle the intricacies of financial markets themselves.
As for my personal approach, I currently maintain a Stocks & Shares ISA with Trading212, so the only option for me was to go with a General Investment Account. I will be investing a modest £10 a month, as well as contributing my rounded-up change, as a practical demonstration of how you can start making your money work for you. By sharing my returns, I aim to illustrate the power of compounding—even on this micro-scale. The strategy here is to drip-feed the investment without going in big.
Investment & Returns 2024 / 2025
I’ve invested in the adventurous option, but remember, past returns aren’t guaranteed, and only invest what you can afford to lose. Readers should consider their own financial situations and the inherent risks of investing.
On average, the main fund has returned 20% annually, except for 2022, when it incurred a loss of 22%. These types of funds are better suited for long-term investors, with the aim to hold for at least five years.
| Month | Investment | Change Roundup | Balance | Gain |
| October | £10 | £7.89 | £17.92 | 0.17% |
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The Funds
Before I talk about the main fund you are investing in, let me quickly summarise what an ETF is. An Exchange-Traded Fund (ETF) is a type of investment fund that holds a collection of assets, such as stocks, bonds or both and is traded on stock exchanges. ETFs offer a key advantage over buying individual stocks because the investment is diversified across multiple sectors. If one sector underperforms, another may offset the losses, providing a natural hedge and reducing overall risk. This makes ETFs a more balanced, cost-effective way to invest.
When investing through Monzo Investments, your money is distributed into several funds, which include UK, European, US and Japanese stocks, as well as UK Gilts and other bonds. The main fund is the iShares MSCI USA ESG Enhanced UCITS ETF (where 17.86% of your capital is invested), which aims to invest in companies with strong ethical, environmental, and social characteristics.
Stocks in this fund include well-known tech giants such as Apple, Microsoft, NVIDIA, Amazon, Google (Alphabet), Meta (formerly Facebook), and Tesla. This selection offers exposure to some of the world’s leading technology and innovation-driven companies.
This ESG (Environmental, Social, and Governance) approach means the fund does not invest in tobacco companies, weapons manufacturers, or businesses involved in unconventional oil and gas extraction. Instead, it focuses on companies that demonstrate responsible business practices and sustainability efforts. However, be aware that not all funds adhere to ESG principles, so if ethical investing is your priority, Monzo Investments may not be the best fit.
Other funds in the adventurous option include:
iShares MSCI USA ESG Screened UCITS ETF
iShares Equity ESG Index Fund (UK)
iShares US Equity MSCI USA SRI UCITS ETF
iShares MSCI EM ESG Enhanced UCITS ETF
iShares Japan Equity ESG Enhanced UCUTS ETF
iShares UK Equity ESG Index Fund (UK)
iShares Continental European Equity Index Fund (UK)
What about Dividends?
iShares fund investments do pay dividends, though the yield and distribution frequency vary depending on the specific ETF.
For example, the iShares MSCI USA ESG Screened UCITS ETF has a current dividend yield of 0.95%, and it has historically paid out small dividends on an annual basis. Similarly, the iShares MSCI EM ESG Enhanced UCITS ETF and others may also pay dividends, although the amounts and yields differ across regions and indices.
It’s important to note that when investing through Monzo, any dividends received are automatically reinvested. This means that instead of receiving cash payouts, the dividends are used to purchase additional shares in the funds, potentially boosting your long-term returns through compound growth.
Fees and Costs
Monzo Investments has a competitive fee structure, with standard customers paying an annual total of 0.59% of their investment value. This includes a 0.14% fund fee and a 0.45% platform fee. While these fees may seem small, they can impact your overall returns over time. For example, if you invest £1,000, you’ll pay about 48p a month in fees, which can add up and affect your net gains. It’s important to factor these fees into your investment decision.
Monzo Perks or Max customers benefit from a reduced fee structure, with the same 0.14% fund fee but a lower 0.35% platform fee, resulting in a total fee of 0.49%. This means that with £1,000 invested, Perks or Max customers would pay about 40p a month, assuming no growth or withdrawals.
It’s also worth noting that fees accrue daily and are charged monthly, covering both Monzo’s service and the underlying fund costs. This straightforward and transparent pricing model is particularly attractive for Perks or Max customers.
So, what’s the takeaway? Monzo Investments is a great option for beginners because it’s easy to use, has a low entry point, and offers a straightforward way to start investing without needing deep financial knowledge. The round-up feature and access to managed funds also make it simple to get started with minimal effort.
Quick Fire Questions
Yes, you can withdraw your money at any time. It can take up to 7 days to process a withdrawal, so it’s always best to initiate the withdrawal in advance if you might need the money unexpectedly.
A Stocks & Shares ISA and a General Investment Account both allow you to invest in various securities, but the key difference is tax treatment. The ISA offers tax-free growth and income within your annual allowance, while investments in a General Investment Account are subject to normal tax rules on capital gains and dividends.
You can check out my short guide on what a Stocks & Shares ISA is here.
Yes, Monzo is regulated by the Financial Conduct Authority (FCA). Your deposits are protected up to £85,000 by the Financial Services Compensation Scheme (FSCS).
This decision depends on your personal risk tolerance. Remember that markets fluctuate regularly, and you’ll see your investment value rise and fall over time. It’s important to consider your financial goals and comfort with risk when choosing an investment strategy.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. The author is sharing their personal experiences and opinions regarding Monzo Investments and specific investment options. Investing involves risks, including the loss of capital. Readers are encouraged to conduct their own research and consult with a qualified financial advisor before making investment decisions. Monzo is regulated by the Financial Conduct Authority (FCA).