Are NZ ETFs better than global ETFs?

NZ ETFs are great for local exposure and income, but global ETFs offer broader diversification. Most investors benefit from holding both.

Can I buy US ETFs from New Zealand?

Yes, NZ investors can buy US-listed ETFs like VTI, SPY, and QQQ via platforms such as Interactive Brokers, Hatch, or Stake.

What's the difference between ETFs and managed funds?

ETFs are traded on the stock exchange and generally have lower fees and more flexibility, while managed funds are bought directly from fund managers.

How do I invest in ETFs in NZ?

You can invest in ETFs using NZ platforms like Kernel, Smartshares (via Sharesies or InvestNow), and SuperLife. For global ETFs, use Hatch or Interactive Brokers.

ETF Investment Guides for NZ Investors

Getting Started with ETFs

Exchange Traded Funds (ETFs) are one of the easiest ways for Kiwi investors to build a diversified portfolio with low fees. Here's your complete guide to getting started.

What Are ETFs?

ETFs are investment funds that trade on stock exchanges, just like individual stocks. Each ETF holds a basket of assets (stocks, bonds, commodities) and allows you to buy a slice of that entire portfolio with a single transaction.

For example, the SPY ETF holds shares in 500 of the largest US companies. By buying one share of SPY, you own a tiny piece of Apple, Microsoft, Amazon, and 497 other companies.

Step 1: Choose Your Investment Platform

Before buying ETFs, you need to open an account with an investment platform. Popular options for Kiwi investors include:

Hatch or Stake: For US-listed ETFs (SPY, QQQ, VTI)
Interactive Brokers: For global ETFs with the lowest fees
Kernel or InvestNow: For NZ-based ETFs and funds
Sharesies: For NZ, Australian, and US ETFs

→ See our full platform comparison guide

Step 2: Decide on Your Investment Strategy

There are two main approaches to ETF investing:

Growth Strategy

Focus on capital appreciation with ETFs that invest in high-growth companies or sectors.

Best for: Younger investors with 10+ year timeframes

Examples: QQQ, SPY, Kernel High Growth

Income Strategy

Focus on dividend-paying ETFs that provide regular income distributions.

Best for: Retirees or those seeking passive income

Examples: JEPI, Smartshares NZ Dividend, VYM

Step 3: Build Your Portfolio

A well-diversified ETF portfolio typically includes exposure to multiple asset classes and regions:

Sample Beginner Portfolio (NZ$10,000)

50% - Global Equities (SPY or VTI) NZ$5,000

30% - NZ Equities (Smartshares NZ Top 50) NZ$3,000

15% - Bonds (AGG or NZ Bond ETF) NZ$1,500

5% - Gold or Commodities (GLD) NZ$500

Important: Not Financial Advice

This is educational information only. Every investor's situation is different. Consider consulting a licensed financial adviser before making investment decisions.

Tax Considerations for Kiwi Investors

PIE vs FIF Tax Treatment

Understanding tax is crucial for ETF investing in New Zealand. There are two main tax regimes:

PIE Funds (Portfolio Investment Entities)

NZ-based funds like Kernel, Smartshares, and InvestNow funds use PIE tax treatment. Your investment is taxed at your Prescribed Investor Rate (PIR), which is typically 10.5%, 17.5%, or 28%.

✓ Simpler tax reporting (handled by fund manager)

FIF Rules (Foreign Investment Funds)

International ETFs (like SPY, QQQ, VTI) are subject to FIF tax rules. You pay tax on deemed income, not actual gains. The Fair Dividend Rate (FDR) method taxes you on 5% of your opening balance each year.

✓ You must report this in your annual tax return

Key Tax Tips

• Keep records of all trades and dividends received
• Use FIF calculators or accounting software for international ETFs
• Consider using PIE funds for simplicity if you're new to investing
• Seek advice from a tax professional for portfolios over NZ$50,000

Common Mistakes to Avoid

✗ Chasing Performance

Don't buy ETFs just because they had great returns last year. Past performance doesn't guarantee future results.

✗ Ignoring Fees

A 1% difference in fees can cost you tens of thousands over decades. Compare MER (management expense ratios) carefully.

✗ Over-Trading

ETFs are best as buy-and-hold investments. Frequent trading increases costs and often reduces returns.

✗ Lack of Diversification

Don't put all your money in one ETF or sector. Spread your risk across different assets and regions.

✗ Panic Selling

Markets go down sometimes. Selling during downturns locks in losses. Stay invested for the long term.

✗ Ignoring Tax

International ETFs require FIF reporting. Factor in the 5% FDR tax when calculating expected returns.

ETF Investment Guides