ETF Investing Glossary
Updated Reviewed quarterly
10 terms every NZ ETF investor encounters — explained in plain English, with NZ-specific context where it matters.
Concept
Cost
Expense ratio
The annual fee charged by a fund manager, expressed as a percentage of fund assets.
MER
Management Expense Ratio — same concept as TER, the term Australian and NZ fund managers prefer.
Bid-ask spread
The gap between buy and sell prices on an exchange — small for liquid ETFs, wider for thin ones.
NZ Tax
PIE fund
NZ Portfolio Investment Entity — taxed at your Prescribed Investor Rate (max 28%), no FIF rules.
FIF
Foreign Investment Fund — NZ tax regime that applies to overseas-share holdings above NZ$50,000 cost-basis.
De minimis (FIF)
The NZ$50,000 cost-basis threshold below which FIF rules don’t apply.