Glossary
What is an expense ratio?
Updated Reviewed quarterly
An expense ratio is the annual fund-management fee charged by an ETF, expressed as a percentage of fund assets. A 0.05% expense ratio on a NZ$10,000 holding costs you NZ$5 per year. The fee is deducted automatically from the fund's net asset value — you never see a separate invoice.
NZX-listed ETFs typically range from 0.25% (Kernel) to 0.75% (Smartshares specialised funds). US-listed ETFs are often cheaper (0.03–0.10%) but trigger NZ FIF tax above NZ$50K cost-basis. Over 30 years a 0.06% fee difference between funds (e.g. SPY 0.09% vs VOO 0.03%) can compound to thousands of dollars on a NZ$50K portfolio. Always compare expense ratios alongside platform fees and FX costs — the all-in cost is what matters.
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