How To Use the Public App To Invest Sustainably

Public is a free investing app and social network built to democratize access to the stock market. 40% of its users are women, and 45% are minority investors. Public also makes finding environmental, social, and governance (ESG) stocks and funds very easy.

SustainFi July 9, 2021

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Rating: Excellent (4.8 / 5)

Public Summary

  • Minimum balance: $0
  • Trading commissions and fees: none (tips optional)
  • Account types: taxable investment accounts

Pros

  • Easy to use for beginners
  • Several thematic options (like “Green Power”) let you easily find environmental, social, and governance (ESG) stocks and funds
  • You can follow other investors and see who else invested in the stocks or funds you like
  • Fractional investing lets you buy “slices” of stocks or funds
  • No trading fees or commissions (but you can tip)
  • No minimum balance
  • Free $5 in stock when you sign up

Cons

  • No human advisor or robo-advisor option
  • No retirement accounts or bank accounts
  • Not the best option for very active day traders (limited research tools, no options trading, no margin loans) or crypto traders (Public intends to roll out crypto in the future)

What is Public?

Public is a free social trading app and an investing social network. The app launched in 2019 to make investing easily accessible to everyone. With Public, you can:

  • Invest in fractional shares (“slices”) of stocks and ETFs
  • Follow your friends or popular influencers and share your ideas
  • Invest in thematic stocks and funds

Historically, many groups of investors missed out on the market’s returns, and Public’s goal is to correct that by making investing easy. The app has a user-friendly interface and has already surpassed 1 million users despite being launched only two years ago.

Public is inclusive: according to CEO Jannick Malling, 40% of investors are women, and 45% are minorities.

Public’s backers include Will Smith, Professor Scott Galloway, Girlboss founder Sophia Amoruso, and skateboarding legend Tony Hawk. You can follow various celebrities on the app and see how they invest.

All users on the platform are verified, and the overall vibe is supportive. By verifying all the users, Public avoids the less savory aspects and the anonymity of some popular Reddit boards.

Public is committed to helping you invest rather than day trade or speculate in the short term. As a result, they don’t offer options trading or margin loans like some other brokers. Tellingly, when you look up a stock, the button next to it says “Invest” and not “Buy.” Public also highlights stocks deemed to be particularly risky by the Securities & Exchange Commission (SEC), for example, stocks of tiny companies.

How does Public work?

Sign-up process. 

  • You sign up by downloading the app on your phone and filling out basic information
  • Public is a social network, so you need to add a profile photo and create a username
  • You get to pick a free slice of stock worth $5 that Public will invest for you. As of July 2021, the options included Amazon (AMZN), Apple (AAPL), Disney (DIS), Shopify (SHOP), and Tesla (TSLA)
  • Upload a photo of your ID and answer a few legal questions
  • Link your debit card or bank account and make your first deposit
  • Pick your interests. Public lets you pick investing themes such as “Green Power,” which are used to personalize your feed. You can also follow individual investors
  • Start investing. Public lets you invest straight away, even before your bank transfer has cleared

Fractional shares (“slices”.) Public lets you buy pieces of stocks or funds. Individual shares can be quite expensive. For example, at the time of this writing, a share of Tesla (TSLA) cost $652. Public lets you buy a fraction of that share for a much smaller amount.

How does Public make money (when trades are free)?

Unlike Robinhood, Public doesn’t take Payment for Order Flow (PFOF), a controversial practice whereby the broker who makes trades for you gets paid for selling your orders to hedge funds to execute (instead of routing the orders directly to exchanges). Some investors feel that if their data is being sold, they are “the product.” 

To avoid this much-debated way of making money and possible conflicts of interest, Public stopped taking PFOF in February 2021. Instead, Public makes money in several other ways:

  • Optional tipping: you can tip when you make a trade to support Public’s commitment to not taking PFOF. Tips are capped at 5% of the transaction amount
  • Share lending: Public’s clearing firm, Apex, can lend your shares to investors or institutions that want to borrow them. These parties pay interest for borrowing the shares, which is split between Public and its clearing firm. (Share lending doesn’t impact your stock ownership)
  • Interest on cash balances: Public earns interest on uninvested cash in your account

Socially Responsible Investing with Public

Public helps you find ESG stocks and funds easily by grouping them into themes. As of July 2021, they featured the following themes:

  • Women in Charge: public companies led by female CEOs
  • Diverse Leadership: companies that are setting the bar when it comes to diversity and inclusion
  • Plant-Based Movement: companies innovating & investing in plant-based food for a better-tasting and greener future
  • Reuse and Reduce: companies converting waste materials into new materials and objects
  • Combat Carbon: companies actively working towards reducing their carbon footprint
  • Green Power: these energy companies produce power through sustainable and renewable means
  • Immigrant Founders: U.S.-based companies that were founded by immigrants
  • Water Works: companies responsible for supplying and purifying drinking water

For example, if you select the “Green Power” theme, the app will suggest a list of 20 stocks like Tesla (TSLA) and NextEra Energy (NEE) and three ETFs, such as the Guggenheim Solar ETF (TAN). This makes ESG stocks and funds easy to find.


Public vs. Stash Invest

Of all the investing apps, Public is most similar to Stash. Stash also lets you invest in stocks and ETFs, offers fractional shares, and lets you discover thematic ESG portfolios. Read our review of Stash here.

Stash is better if you want:

  • A checking account with a debit card with stock back rewards 
  • Retirement accounts

Public doesn’t offer any of these. However, Stash isn’t as good for discovering thematic ESG portfolios (they only list six funds in their Missions & Causes line-up.)

Public is better if you want to:

  • Easily discover ESG stocks and funds 
  • Avoid a membership fee (Public is free, but Stash charges $1-9 per month)

Neither Stash nor Public offer access to human advisors or create a balanced portfolio for you. If you are looking for these things, consider Acorns Invest.

💰 Takeaway

  • Public is a good option for beginners to get into investing. The app is very user-friendly, and the sign-up process is seamless
  • The social component lets you follow your friends and influencers
  • Several ESG themes are pre-selected for you
  • However, Public may not be the best option if you want to day trade and are looking for charts and data

🔔 Learn how to pick environmental, social, and governance stocks.