Updated Reviewed quarterly
KGM vs USF: Two NZ-PIE Global Wrappers
KGM · Kernel
TER 0.25% · 100 stocks · global
USF · Smartshares
TER 0.34% · 500 stocks · US-only
Both NZ-domiciled, both PIE-taxed (max 28% PIR), both FIF-exempt. The choice is about geographic concentration and TER, not tax wrapper.
In 30 seconds: KGM (Kernel S&P Global 100) gives diversified global equity exposure across 100 large-cap companies at 0.25% TER. USF (Smartshares US 500) tracks the S&P 500 — pure US exposure at 0.34% TER. Both are NZX-listed Portfolio Investment Entities (PIE), so distributions are taxed at your Prescribed Investor Rate (max 28%) and Foreign Investment Fund (FIF) rules do not apply. KGM is cheaper and more diversified geographically; USF is the cleanest NZ-PIE way to own the S&P 500.
- KGM: Kernel S&P Global 100 — 0.25% TER, 100 global large-caps
- USF: Smartshares US 500 — 0.34% TER, S&P 500
- Both PIE-taxed (max 28% PIR), no FIF compliance
- KGM is 0.09 pp cheaper in headline TER
- Where to buy: Sharesies, InvestNow (USF zero-fee), Kernel direct (KGM zero-fee), Invest Direct
Head-to-head comparison
| Feature | KGM | USF |
|---|---|---|
| Fund name | Kernel Global 100 Fund | Smartshares US 500 ETF |
| Issuer | Kernel | Smartshares |
| Index | S&P Global 100 | S&P 500 |
| Approx. holdings | 100 | 500 |
| Geography | Global (US-heavy by market cap) | US only |
| Total expense ratio | 0.25% | 0.34% |
| Exchange | NZX | NZX |
| Tax wrapper | PIE (max 28% PIR) | PIE (max 28% PIR) |
| FIF compliance | No | No |
| Zero-fee direct platform | Kernel | InvestNow |
When each fund makes sense
Suited to KGM
- • Want a single global core fund at the lowest possible TER
- • Prefer diversification across countries, not just the US
- • Already use Kernel direct (zero ticket fee)
- • Want a PIE alternative to VT or VXUS for global ex-NZ exposure
Suited to USF
- • Specifically want S&P 500 exposure (500 vs 100 holdings)
- • Want the NZ-PIE alternative to VOO / SPY
- • Already use InvestNow (zero commission on Smartshares)
- • Comfortable with US-concentrated exposure
These are characteristics of each fund, not investment recommendations. Consult a licensed financial adviser about your specific circumstances.
NZ-tax view
Both KGM and USF are NZ-domiciled PIE funds. That means distributions and capital gains are taxed inside the fund at your Prescribed Investor Rate (max 28%). You don't include the income on your IR3, and Foreign Investment Fund (FIF) rules do not apply — no NZ$50,000 threshold, no Fair Dividend Rate calculation, no annual return.
Compare this with direct US ETFs (VOO, SPY, VT): once your cost-basis exceeds NZ$50K, you owe FIF tax on a deemed return regardless of actual gain, plus 15% US withholding tax on dividends. The PIE wrapper is the main structural advantage of both KGM and USF over their US-listed equivalents.
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