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Yieldstreet vs Fundrise: Where should you invest?

Updated: Sep 14, 2023


Yieldstreet vs Fundrise



Introduction: Yieldstreet vs Fundrise

In the rapidly evolving world of online investment platforms, two names stand out in the realm of alternative investments: Yieldstreet and Fundrise. Both platforms are designed to open up new investment opportunities previously reserved for institutional investors or high-net-worth individuals.


However, they differ significantly in their offerings, operations, and target audiences. This article aims to provide a comprehensive comparison of Yieldstreet vs Fundrise to help potential investors make an informed decision.


Platform Overview

Yieldstreet

Yieldstreet Dashboard

Yieldstreet is an online investment platform that specializes in alternative asset investing. It provides access to a variety of investments that are generally uncorrelated to the stock market, including real estate, art, legal finance, and commercial loans. Aimed at accredited investors, Yieldstreet enables the diversification of portfolios with investments that were traditionally difficult for individual investors to access.


Fundrise

Fundrise Dashboard

On the other hand, Fundrise primarily focuses on crowdfunded real estate investments. The platform offers a range of eREITs (Electronic Real Estate Investment Trusts) and eFunds, allowing investors to put their money into diverse portfolios of real estate projects. With a low minimum investment requirement, Fundrise is designed to make real estate investing accessible to a broader range of investors, including non-accredited investors.


Despite the similarities in their approach to democratizing investment, Yieldstreet and Fundrise target slightly different segments of the market and offer distinct investment opportunities. In the following sections, we will dive deeper into the comparative analysis of these two platforms, examining investment opportunities, minimum investments, liquidity, fees, user experience, and transparency.


Comparative Analysis: Investment Opportunities

Yieldstreet Asset Classes

Yieldstreet

Yieldstreet provides a multitude of investment opportunities across various asset classes, such as real estate, marine finance, art finance, and litigation. These offerings allow investors to diversify their portfolio and potentially shield against market volatility. However, it's worth noting that these investments can carry a higher risk level, necessitating careful consideration and potentially restricting their appeal to more experienced or accredited investors.


Fundrise

Fundrise's investment offerings revolve around real estate. It leverages technology to offer a range of eREITs and eFunds that are designed to suit different investment goals. This focus on real estate might not provide as much diversification as Yieldstreet but makes Fundrise a compelling choice for those specifically interested in real estate investing.


Minimum Investment

Yieldstreet

Yieldstreet typically requires a minimum investment of $10,000, which can be a barrier to entry for some investors. This $10,000 investment can be self-guided if you are an accredited investor, or if not, it will be invested in Yieldstreet's Prism Fund.


Fundrise

Compared to Yieldstreet, Fundrise offers a much lower barrier to entry with a minimum investment of just $500 for its Starter Portfolio.


Fees and Costs

Yieldstreet

Yieldstreet charges a 1-4% annual management fee and may also charge origination fees, depending on the investment.


Fundrise

Fundrise charges a 0.15% annual asset management fee, making its cost structure simpler and easier to understand. This does not account for asset or fund-level fees. Asset and Fund-Level fees are 0.85% annually, making the total management fee for Fundrise 1%.



User Experience and Platform Navigation

Yieldstreet

Yieldstreet offers an intuitive and user-friendly platform that makes browsing and choosing investments straightforward. The platform provides comprehensive information about each investment, including detailed documentation and risk assessments. In terms of accessibility, Yieldstreet offers a robust mobile app, allowing investors to manage their portfolios on the go. However, the platform is restricted to accredited investors, limiting its accessibility to a wider audience.


Fundrise

Fundrise, with its intuitive and clean design, offers a user-friendly experience for investors. Allowing investments for both accredited and non-accredited investors, Fundrise provides an opportunity for a wider audience to participate in real estate investing. The platform also features a well-designed mobile app, offering accessibility to portfolios anytime, anywhere.


Pros and Cons

Yieldstreet

  • Pros: Wide range of alternative investments, potential for high returns, recently introduced secondary market.

  • Cons: High minimum investment.

Fundrise

  • Pros: Lower minimum investment, open to non-accredited investors, focused on real estate investing.

  • Cons: Limited investment diversification, and potential penalties on early withdrawals.

Conclusion

In conclusion, both Yieldstreet and Fundrise offer unique approaches to alternative investing. Yieldstreet, with its wide variety of asset classes, seems well-suited for accredited investors seeking a diversified portfolio. Fundrise, with its focus on real estate and lower minimum investments, could be an attractive option for those looking to get their feet wet in real estate investing.


Ultimately, the choice between Yieldstreet and Fundrise comes down to individual investment goals, risk tolerance, and investment budget. As always, potential investors should conduct their research and consider seeking advice from financial professionals before diving in.



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