Lowest-Cost ETFs for NZ Investors 2026

The lowest published total expense ratio (TER) on the funds we track is SPYM at 0.02%, an S&P 500 tracker. Among NZ-domiciled PIE funds — which avoid the FIF calculation for NZ residents — the lowest TER is NZ Govt Bonds (NGB) at 0.20% (NZ government bonds), with Kernel's Kernel NZ 20 and Kernel Global 100 both at 0.25%. Whether the lower headline TER is actually cheaper for you depends on your tax position — see the next question.

No. A US-listed fund can have a much lower TER than a NZ-listed PIE, but for NZ residents the after-tax cost also depends on tax structure and currency. US-listed funds are taxed under the Foreign Investment Fund (FIF) rules once your total foreign holdings exceed the de minimis cost-basis threshold, and their US-dollar distributions carry US withholding. NZ-domiciled PIE funds are taxed at your capped Prescribed Investor Rate (PIR) with no FIF calculation. Depending on your marginal rate, PIR, and portfolio size, a PIE fund with a higher TER can produce a lower total cost than a cheaper US-listed fund. FX conversion spreads on buying and selling US-dollar funds are a further cost the headline TER does not capture.

On TER alone, SPYM (0.02%) is the lowest-cost S&P 500 tracker we cover, ahead of VOO (0.03%). Both are US-listed and FIF-eligible. The NZX-listed PIE alternative is US 500 (USF) at 0.34% — a higher headline TER, but PIE-taxed rather than FIF-taxed, which can be the lower-total-cost route for some NZ investors. The "cheapest" answer therefore depends on whether you optimise for TER or for after-tax cost.

US-listed ETFs generally have the lower published TER — the lowest we track is SPYM at 0.02%, and several US-listed core funds sit at 0.03%. NZ-listed and unlisted PIE funds are typically higher on TER (the lowest PIE we track is NZ Govt Bonds (NGB) at 0.20%), but they are PIE-taxed rather than FIF-taxed and settle in NZ dollars, so there is no FX spread and no FIF calculation for the investor. Lower fee does not automatically mean lower total cost once NZ tax and currency are included.

Below the FIF de minimis cost-basis threshold, US-listed funds are taxed like other foreign shares and their low TER is the main cost you pay. Above the threshold, FIF rules apply to your foreign holdings (the Fair Dividend Rate method is the most common), which changes the after-tax comparison against NZ-domiciled PIE funds. Larger portfolios that sit above the threshold are where the PIE-vs-FIF trade-off matters most; smaller portfolios below it can lean on the lowest-TER US-listed option with less tax complexity.

No. A low TER reduces the fee drag on returns, but it says nothing about the fund's underlying returns, volatility, or how it fits your goals and risk tolerance. Two funds with identical TERs can hold very different assets. Cost is one input into a suitability decision, alongside asset class, tax structure, currency exposure, diversification, and time horizon. This page compares published fees only — it is not personalised advice.