Which New Zealand providers offer passive or index funds?

[huxley]

Hey guys,

Just wondering if any of you have invested in any Vanguard S&P 500 type funds from NZ?

I'm weighing options and the offers from NZ (smartshares ETF) look pretty poor price wise. Given the focus on NZ/Australia on offer I prefer to hold individual instruments in the local markets.

I've got my Kiwisaver currently in a currency hedged overseas shares fund as the only exposure to overseas markets at the moment.

Keen to hear from anyone else in a similar situation! :eek2:

Cheers

[blackcap]

Hey guys,

Just wondering if any of you have invested in any Vanguard S&P 500 type funds from NZ?

I'm weighing options and the offers from NZ (smartshares ETF) look pretty poor price wise. Given the focus on NZ/Australia on offer I prefer to hold individual instruments in the local markets.

I've got my Kiwisaver currently in a currency hedged overseas shares fund as the only exposure to overseas markets at the moment.

Keen to hear from anyone else in a similar situation! :eek2:

Cheers

Hi huxley, I am in the same boat as you I think. I use Smartshares for my kiwisaver but invest in Vanguard products on my own account. That is the only way I can see you can split it out nicely. I do not really want to use any of the so called "active" NZ managers as I do not think they have a positive alpha. The problem I have with smartshares is that their MER is still so high due to small fund size.

[huxley]

Hey Blackcap, Thanks for your reply. How do you purchase the Vanguard ETFs from NZ?

The only way I can see of doing this is if you buy on the ASX but then you seem to be taking a compounded currency risk (NZD/AUD & AUD/USD).

I'm currently only signed up for ANZ Share and Bond and in with Superlife for kiwisaver.

[blackcap]

Hey Blackcap, Thanks for your reply. How do you purchase the Vanguard ETFs from NZ?

The only way I can see of doing this is if you buy on the ASX but then you seem to be taking a compounded currency risk (NZD/AUD & AUD/USD).

I'm currently only signed up for ANZ Share and Bond and in with Superlife for kiwisaver.

Hi Huxley, I do buy the Vanguard ETS from NZ but using my AUD account. For me the currency risk is negligible because at the end of the day you are purchasing the stock in whatever jurisdiction that may be and it does not matter where you buy your ETF from. Say you buy Vanguard Dow fund then you are buying the 30 Dow stocks (USD stocks) whether you buy them from Australia or the US makes no difference to the outcome or value of your ETF. Hope that helps.

[Buffett Jr]

Hey guys,

Just wondering if any of you have invested in any Vanguard S&P 500 type funds from NZ?

I'm weighing options and the offers from NZ (smartshares ETF) look pretty poor price wise. Given the focus on NZ/Australia on offer I prefer to hold individual instruments in the local markets.

I've got my Kiwisaver currently in a currency hedged overseas shares fund as the only exposure to overseas markets at the moment.

Keen to hear from anyone else in a similar situation! :eek2:

Cheers

Superlife do low cost index funds of NZ, AUS, US, UK and emerging markets.

I have my kiwisaver through them. They are fantastic for what I need. I used to be with ASB (who were quite low in fees and invest passively) but I liked the ability to choose the % of funds invested in each asset class rather than just choose a "growth" fund with various asset classes.

[huxley]

Superlife do low cost index funds of NZ, AUS, US, UK and emerging markets.

I have my kiwisaver through them. They are fantastic for what I need. I used to be with ASB (who were quite low in fees and invest passively) but I liked the ability to choose the % of funds invested in each asset class rather than just choose a "growth" fund with various asset classes.

Ah thanks, I'll take a look at the super life funds. I must have misread their webpage and didn't pick up that they offered funds outside of KiwiSaver.

I'm using the "my mix" option for kiwi saver and have a small percentage in bonds and most in overseas shares which I'll just adjust as time goes by.

Yeah the asb fees are also still quite high considering the "growth fund" appears to just select several Vangaurd funds.

[JonathanGiles]

I invest in Vanguard ETFs (at present VTI, but I plan to eventually also go into VXUS very soon). I do this using E*Trade as my brokerage, which allows for investment into US shares at a relatively low commission rate. Of course, there are the dual concerns of NZD <--> USD currency conversion and FIF taxes, but having done a _lot_ of research, I am comfortable with this approach. If you have any questions I am happy to help where I can.

[voltage]

Hi JonathanGiles
I am doing something similar but will use Vanguard VGS on the asx. This was introduced recently. This is ex Aussie with dividends reinvested with a MER or 0.18%. Since it is domiciled from australia and not US you do not have death duty tax implications. It has around 60% invested in the US. I use comsec, like etrade have much lower brokerage.

[huxley]

I invest in Vanguard ETFs (at present VTI, but I plan to eventually also go into VXUS very soon). I do this using E*Trade as my brokerage, which allows for investment into US shares at a relatively low commission rate. Of course, there are the dual concerns of NZD <--> USD currency conversion and FIF taxes, but having done a _lot_ of research, I am comfortable with this approach. If you have any questions I am happy to help where I can.


Hey I know this is a delayed response but any how - What amount of funds would you consider the minimal amount to justify this approach? I ended up sticking with Superlife in the end and will continue to drip feed but would like to look at Vanguard ETF options more closely eventually.

Cheers

[newtrader]

Hi JonathanGiles

Is it easier to open up an E*Trade brokerage account from New Zealand compared to others such as ComSec? I'm thinking about investing in Vanguard ETFs on the ASX and was wondering if this approach is cheaper than going through ASB/ANZ Securities. What's a cost effective method of exchanging NZD to AUD and transferring it an E*Trade account?

[Joshuatree]

"Sharetrader Back Office has a thread re trying to open up an Aus trading account. As of this moment a kiwi cannot open an Aus trading account; rules have changed.

[dingoNZ]

I opened a e-trade one today, luckily I still have an ANZ australia account, which made things very easy

[JonathanGiles]

Hey I know this is a delayed response but any how - What amount of funds would you consider the minimal amount to justify this approach? I ended up sticking with Superlife in the end and will continue to drip feed but would like to look at Vanguard ETF options more closely eventually.

Cheers

I don't think there needs to be a minimal amount - I started small and grew as finances allowed. There are things to consider, like taxes, foreign exchange, etc, but all in all I find it a good and economical approach.

[JonathanGiles]

Hi JonathanGiles

Is it easier to open up an E*Trade brokerage account from New Zealand compared to others such as ComSec? I'm thinking about investing in Vanguard ETFs on the ASX and was wondering if this approach is cheaper than going through ASB/ANZ Securities. What's a cost effective method of exchanging NZD to AUD and transferring it an E*Trade account?

I'm sorry but I can't help - my E*Trade account is with their Hong Kong subsidiary, not the Australian one.

[Lizard]

Well we can now get 9 Vanguard ETF's baked in a PIE on the NZX :):
http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11485120

[Harvey Specter]

Well we can now get 9 Vanguard ETF's baked in a PIE on the NZX :):
http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11485120See more comments around fees and tax on the Smartshare thread.

[Toulouse - Luzern]

Vanguard Funds certainly interest me.

[Harveyp]

Has anyone invested in these vangaurd funds through ASB online share trading?? Is that the best way to buy into them?

[huxley]

Bit of an update since a couple of new providers have opened up shop recently:

http://investnow.co.nz/award-winning-managed-funds/

http://simplicityfunds.kiwi

Haven't had a chance to look at the details, but fees look attractive for passive vehicles.

[Kelvin]

Bit of an update since a couple of new providers have opened up shop recently:

http://investnow.co.nz/award-winning-managed-funds/

http://simplicityfunds.kiwi

Haven't had a chance to look at the details, but fees look attractive for passive vehicles.

Investnow looks interesting. Similar to the RaboDirect managed funds, except they have a couple of cheap Vanguard funds. Not sure I want to use a company that just suddenly popped up through

[voltage]

yes, http://investnow.co.nz/award-winning-managed-funds/ has 2 vanguard funds with very low fees which are their wholesale rate, how do they make money?

[huxley]

yes, http://investnow.co.nz/award-winning-managed-funds/ has 2 vanguard funds with very low fees which are their wholesale rate, how do they make money?

They're owned by http://iisolutions.co.nz/about-us/

I'm just guessing, but I think they may be using the Vanguard funds as loss leaders (hoping you'll also send some $ to their other more lucrative funds).

[voltage]

I invest in vanguard funds using by purchasing efts via the asx. I like having control but must admit this is the next best thing. I wonder if they are held in a custodial account?

[amygdala]

Not sure I want to use a company that just suddenly popped up through

Fully owned by a company that has been around for several years and already has more than $1 billion FUM though.

[amygdala]

They're owned by http://iisolutions.co.nz/about-us/

I'm just guessing, but I think they may be using the Vanguard funds as loss leaders (hoping you'll also send some $ to their other more lucrative funds).

Possibly. Just reading the FAQ and they get paid by the fund managers including Vanguard (and some of their own funds are on the platform too).

[Kelvin]

I wonder what happens to your investments if Investnow goes bust or shuts down

[kiwico]

I have VTS and VXUS via Interactive Brokers. It is easy to open an account but less easy than others to trade. Currency conversion is very cheap with IB.

I have looked at Simplicity but it charges 0.06% on all funds whilst the underlying costs of VTS and VXUS are much less.

There is also the FIF aspect. Simplicity may be a PIE and so have no tax to pay but as a company / trust it will be charged at the FIF rate irrespective of whether the funds go up or down. In my own name FIF tax is only payable if the funds increase.

[macduffy]

Currency conversion is very cheap with IB.

Cheap, as in fees - or cheap, as in close spreads between Buy and Sell rates quoted?

[kiwico]

Cheap, as in fees - or cheap, as in close spreads between Buy and Sell rates quoted?

Cheap fees, sometimes only a US dollar or two, and a small spread. Double bonanza!

[voltage]

Kiwico, how does custodial work with IB

[Kelvin]

Invest Now offers the Simplicity funds now

[Kelvin]

Invest Now offers the Simplicity funds now

Update - Simplicity have pulled their funds from Investnow :(