ETF Investing Glossary

Updated 2026-05-02 Reviewed quarterly

10 terms every NZ ETF investor encounters — explained in plain English, with NZ-specific context where it matters.

Concept

A basket of investments that trades on a stock exchange like a single share.

Assets Under Management — the total dollar value of a fund.

The annual fee charged by a fund manager, expressed as a percentage of fund assets.

Management Expense Ratio — same concept as TER, the term Australian and NZ fund managers prefer.

The gap between buy and sell prices on an exchange — small for liquid ETFs, wider for thin ones.

Trailing 12-month distributions divided by current price, expressed as a percentage.

How closely an index ETF follows its benchmark — usually a few basis points per year.

NZ Portfolio Investment Entity — taxed at your Prescribed Investor Rate (max 28%), no FIF rules.

Foreign Investment Fund — NZ tax regime that applies to overseas-share holdings above NZ$50,000 cost-basis.

The NZ$50,000 cost-basis threshold below which FIF rules don’t apply.