High interest savings fintech Blossom sees investors tip $75 million into its funds

Investment fintech Blossom believes it’s on target for its goal of $100 million in funds under management (FUM) by the end of the year, having hit $75 million thanks to a new product targeting a 7% return.

The fixed income app, launched in 2021 by siblings Gaby and Ali Rosenberg, has been able to lift its returns as the RBA increased interest rates over the last two years. It’s a diversified fixed income fund, accessed via the Blossom app.

The name comes from nickname Gaby’s late grandfather gave her. The startup’s is being backed by Fortlake Asset Management, which has billionaire investor Alex Waislitz as its major shareholder.

When it launch in mid-2021, targeting millennial savers and women, the return was 3% when interest rates were near zero.

Alongside the original Blossom Save product, now targeting a 5.95% annual return, with $56 million in FUM, the Rosenbergs launched Blossom Plus targeting 7%, which hit $20m in FUM in March.

While you only need $5 to open a Blossom Save account, with instant access to your money, the Blossom Plus fund has a $5,000 minimum and offers quarterly withdrawals.

While several banks offer high interest accounts above 5%, then come with a range of conditions and fees, and are often introductory rates that fall below 5% after 3-4 months.

Gaby Rosenberg said they’d seen a surge in interest in fixed income investments since expanding their product offering, adding that another interest rate hike by the RBA remains likely before the end of the year.

“Bonds and fixed income have underpinned our investment portfolio since inception, offering more stable and predictable returns, particularly during periods of market volatility,” she said.
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“The market’s underestimation of the likelihood of imminent rate hikes presents an opportunity for stability for those investing in fixed income funds.

“The Blossom Fund is diversified across more than 400 exposures and has had 100% positive months since inception, despite 13 rate rises since May 2022. This puts Blossom investors in a strong position to ride out, and even benefit from, further potential rate hikes in 2024.”