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Smarter by the dozen: InvestNow adds five NZX passive funds

19th March 2019

New Zealand’s biggest direct-to-consumer managed funds platform, InvestNow, has added five index products to its range in response to customer demand.

Mike Heath, InvestNow general manager, says the platform took on the five exchange-traded funds (ETFs) offered by the NZX-owned Smartshares following a client survey.

“We already had seven Smartshares ETFs on InvestNow but our clients were asking for more choice,” Heath said. “The five new funds were clear favourites among our investors.”

The new Smartshares ETFs now available on InvestNow comprise the: Emerging Markets Fund (EMF); NZ Dividend Fund (DIV); NZ Property Fund (NPF); US Large Growth Fund (USG); and, US Mid Cap Fund (USM).

According to Heath, the expanded ETF suite significantly enhances the choices now available to InvestNow clients looking to build diversified portfolios from index products.

“Four of the seven existing Smartshares ETFs on InvestNow were slanted to Australasian equities along with funds targeting global, European and top 500 US stock indices,” he said. “But with five extra asset classes to choose from our investors can develop more-nuanced portfolios tailored to their own risk profiles and preferences.”

Heath said Smartshares, and passive funds in general, were popular on the InvestNow platform as clients sought cost-effective exposure to different asset classes.

As well as the dozen Smartshares ETFs, InvestNow offers two Vanguard unlisted passive funds that track a broad global equities index and four from AMP Capital for global shares, global fixed interest, Australian property and NZ shares.

“Some investors prefer to use ETFs, which trade like shares, while others like the traditional unlisted fund structure – there are pros and cons for both approaches,” he said. “It’s really up to the individual investor.”

Hugh Stevens, Smartshares CEO, said New Zealand was rapidly catching on to the ETF trend that has exploded offshore over the last 10 years. Last year total ETF assets under management globally cracked through the US$5 trillion mark, representing an increase of about US$4.3 trillion since 2008.

“While the NZX was one of the first in the world to offer ETFs, until recently the New Zealand market has lagged the global trend,” Stevens said. “But over the last couple of years Smartshares has seen significant growth – thanks in part to innovative platforms like InvestNow – with almost $900 million now invested by individual clients, up over 25 per cent year-on-year.”

In total, Smartshares manages about $3.1 billion in its ETF range with about $1.8 billion coming via the NZX-owned SuperLife KiwiSaver and superannuation funds.

Smartshares currently offers a range of 23 ETFs, enabling investors to build broadly diversified portfolios.

The Smartshares ETF set available on InvestNow has all-in fees from 0.34 per cent to 0.75 per cent. “That is significantly less than the cost of investing directly into offshore ETFs where investors incur brokerage, currency exchange and custody costs. Our fees have come down recently and we expect to lower prices further as the Smartshares ETFs continue to build scale,” Stevens said.

Heath said InvestNow clients simply pay the Smartshares ‘sticker price’ with no extra management or administration fees as with all products listed on the platform.

“We’re dedicated to providing our clients with quality investment funds under a transparent pricing model that dispenses with obscure admin and so-called ‘member fees’ that add unnecessary costs for investors,” he said.

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