ETFs (Exchange-Traded Funds) are investment funds that are traded on a stock exchange like individual stocks. An ETF is a basket of securities that are designed to track the performance of a particular index, such as the NZX 50, S&P 500, or NASDAQ. are typically managed passively, meaning that they aim to replicate the performance of the index they are tracking, rather than trying to outperform it.
In New Zealand, there are several ETF providers, such as Smartshares, BetaShares, AMP Capital, and Harbour Asset Management. These providers offer that cover a range of asset classes, including equities, fixed income, and commodities. Each ETF is designed to track a specific index, sector, or asset class, and can provide investors with exposure to a diverse range of securities with a single investment.
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ETFs offer several benefits to investors, including lower costs, diversification, and liquidity. typically have lower expense ratios than actively managed funds, making them a cost-effective way to invest in a diversified portfolio of securities. Additionally, trade on an exchange like individual stocks, making them more liquid than traditional mutual funds.
Investors should carefully consider their investment objectives, risk tolerance, and other factors before investing . It’s also important to understand the fees and expenses associated with and the underlying assets they track. It’s recommended to consult with a financial advisor before making any investment decisions.
New Zealand that investors can consider, including:
- Smartshares: Smartshares is New Zealand’s largest ETF provider, offering a range of across different asset classes, including equity, fixed income, and commodity. They offer ETFs that track various indices, such as the S&P/NZX 50 Index and the S&P/ASX 200 Index.
- BetaShares: BetaShares is an Australian ETF provider that offers several ETFs on the New Zealand Stock Exchange. Their cover a range of asset classes, including equities, fixed income, and currency ETFs.
- AMP Capital: AMP Capital offers a range of ETFs in New Zealand, including equity, fixed income, and multi-asset ETFs. They offer that track various indices, such as the FTSE NZ 50 Index and the S&P/ASX 200 Index.
- Harbour Asset Management: Harbour Asset Management offers a range of ETFs that invest in New Zealand and Australian equities. They also offer a multi-asset ETF that invests in a range of asset classes.
- InvestNow: InvestNow is an online investment platform that offers access to several in New Zealand, including Smartshares and AMP Capital. They also offer from international providers such as Vanguard and BlackRock.
Investors should carefully consider their investment objectives, risk tolerance, and other factors before investing . It’s also important to understand the fees and expenses associated with ETFs and the underlying assets they track. It’s recommended to consult with a financial advisor before making any investment decisions.
Here is a list of some of available in New Zealand:
- Smartshares NZ Top 50 ETF (FNZ)
- Smartshares NZ Top 10 ETF (TNZ)
- Smartshares US 500 ETF (USF)
- Smartshares US Large Growth ETF (USG)
- Smartshares US Large Value ETF (USV)
- Smartshares Total World ETF (TWF)
- Smartshares Australian Resources ETF (AUS)
- Smartshares Global Bond ETF (BND)
- BetaShares NASDAQ 100 ETF (NDQ)
- BetaShares Asia Technology Tigers ETF (ASIA)
- BetaShares S&P/ASX Australian Technology ETF (ATEC)
- BetaShares Global Energy Companies ETF (FUEL)
- AMP Capital NZ Shares Index Fund (AIF)
- AMP Capital Global Property Securities Fund (GLIN)
- AMP Capital Global Infrastructure Securities Fund (INFA)
- Harbour Asset Management Australasian Equity Income Fund (HAE)
- Harbour Asset Management Active Growth Fund (HAG)
- Smartshares NZ Dividend ETF (DIZ)
Here are some tips for investing in ETFs in New Zealand:
- Understand the ETF’s objective: Each ETF is designed to track a specific index, sector, or asset class, so it’s important to understand the ETF’s objective before investing. Make sure the ETF aligns with your investment goals and risk tolerance.
- Compare expense ratios: Typically have lower expense ratios than actively managed funds, but fees can still vary among ETFs. Compare the expense ratios of different ETFs before investing to ensure you’re getting the best value for your investment.
- Diversify: ETFs offer investors exposure to a diversified portfolio of securities with a single investment. Consider diversifying your portfolio across different asset classes, sectors, and regions to reduce risk.
- Consider liquidity: ETFs trade on an exchange like individual stocks, which means they are more liquid than traditional mutual funds. However, some ETFs may have lower trading volumes, which could affect liquidity. Consider the liquidity of an ETF before investing.
- Use dollar-cost averaging: Consider using dollar-cost averaging to invest in ETFs over time. This strategy involves investing a fixed amount of money at regular intervals, regardless of the ETF’s price. Dollar-cost averaging can help reduce the impact of market volatility on your investment.
- Consult with a financial advisor: Investing in ETFs can be complex, and it’s important to understand the risks and potential rewards before investing. Consider consulting with a financial advisor before making any investment decisions.
ETFs New Zealand faqs
What is an ETF?
An ETF, or exchange-traded fund, is a type of investment fund that trades on a stock exchange like a stock. It holds assets like stocks, bonds, or commodities, and the price of the ETF shares fluctuates with the value of the underlying assets.
What are the benefits of investing in ETFs?
ETFs offer several benefits to investors, including diversification, low costs, and ease of trading. Because ETFs hold a basket of assets, they provide exposure to multiple companies or sectors, which helps to spread out risk. ETFs also typically have lower fees than actively managed funds, and they can be bought and sold like a stock, making them easy to trade.
How do I invest in ETFs in New Zealand?
To invest in ETFs in New Zealand, you’ll need to open a brokerage account with a New Zealand-based broker. Some popular options include ASB Securities, Sharesies, and InvestNow. Once you’ve opened an account, you can search for and purchase ETFs listed on the New Zealand stock exchange.
What are some popular ETFs in New Zealand?
Some popular ETFs available in New Zealand include the Smartshares NZ Top 50 ETF, the Smartshares NZ Bond ETF, and the BetaShares Australia 200 ETF. There are also ETFs that provide exposure to specific sectors, such as technology or healthcare.
What are the risks of investing in ETFs?
As with any investment, there are risks associated with investing in ETFs. The value of the ETF shares can fluctuate with the value of the underlying assets, and the ETF may not perform as well as expected. There is also the risk of market volatility, which can cause the value of the ETF to decline. It’s important to do your research and understand the risks before investing in any ETF.
