Shrek Royalties To T-Bills: Disruptive Diversification Of New Breed Of Retail Platforms

Retail investing is catching on as products as diverse as low-risk Treasuries and speculative offerings based on film scores are becoming increasingly popular.

Royalty-based products begin with Shrek score

Toward the other end of the risk spectrum, Public.com is also increasing its offerings of less tangible assets. One the first it offered was investment in art. This has led to its first royalty-based product.

“Our first asset was based on the score of the Shrek movies and it was a high-yielding, uncorrelated asset that our customers oversubscribed to in a very short period of time,” Stephen Sikes, COO at retail investing app Public.com, said at Benzinga’s Fintech Deal Day and Awards.

Sikes added that retail investing has changed since the pandemic, as clients are becoming more cautious amid an economic backdrop of higher inflation and interest rates – with less disposable income.

“Retail investing is like an after-tax investment account,” he said.

“The industry has seen a shift from the 2020-2021 speculative go-go years, towards a more broad-based and conservative income-focused allocation of capital.”

Public.com introduces direct Treasury investing

When Public.com was launched in 2019, like most of its rivals it was mainly focused on equities and ETFs that followed other asset classes such as commodities CMDY. But as interest rates began to move higher, the company found its clients asking how they could gain exposure to Treasury markets, without having to go with an ETF GOVT.

Within the last year Public.com has used the same type of fractionalization techniques used in its equity offerings, which mean clients don’t have to buy whole stocks, to introduce Treasury products as investors have demanded lower-risk yield on the US government bond market.

“Traditionally investing in T-bills involved high minimum investment and going through costly, old-school brokers,” said Sikes. So we have introduced Treasury investing, making it almost as easy for investors to gain access to fixed income investments as it is to invest in a savings account.”

As retail investors become more financially literate, they are becoming more cautious of the speculative boom that powered shares in platforms such as RobinHood HOOD. Their demands are changing and the platforms are changing with them to meet demands for new products.

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