SmartShares is slightly more expensive (<1% difference) than going through Hatch/Stake over the long term if SmartShares has the funds you are after, BUT you end up paying tax through PIE rather than FIF overseas tax rate, which is a lot easier for the average investor. You will need to calculate things for yourself for your own investing situation. I did find a renewable energy ETF on Hatch but Hatch does have some high fees as well.. Also a lot of people seem to be using investnow whereas I went straight to the Smartshares website. The first having a fee of 0.5% and the second having a fee of 0.33, with the only difference being that the AMP fund tracks the NZ-50 index closely, whereas the Smartshares NZX-50 fund has a maximum weighted cap of 5% for individual companies making up the fund. Fund Platforms are services that offer you access to a variety of different funds to invest in, sometimes described as a “Fund Supermarket”. Vanguard International funds through InvestNow are cheaper than buying them through the US exchange due to FX fees. A 0.5% fee is included in our estimated exchange rate, and we offer special rates for deposits over $100k. InvestNow and Smartshares is cheaper for smaller portfolio’s, but Hatch is better for large portfolio’s where the broker and FX fees become relatively small. It's personal preference - how badly do you want to invest in individual shares and renewable energy? Let me assume for these calculations you are at the 33% tax bracket and your PIR is 28%. It allows Kiwis to invest in more than 140 NZ and global managed funds online, plus provides access to … Hatch gives you more control over what you invest in although you pay for it with fx costs and brokerage. If you don't withdraw that money for at least two years, then you only pay 0.03% and pull ahead with Hatch by year three. If you are under $50,000 in all foreign assets (not including those in PIE’s), you will be paying tax on dividends alone. Smartshares will be cheaper of course, and much easier since you just buy an ETF and become instantly diversified. What is the best way to buy US mutual funds currently from New Zealand? InvestNow allows you access to Smartshares without the fees. The dividend yield for VOO is about 2%, so you are paying 33% x 2% which is 0.66%, under half that you pay with Smartshares. A $1.50 USD fee is deducted from your first deposit to cover the filing of a compulsory US tax form on your behalf. Smartshares is supervised by the New Zealand Public Trust government organisation, the assets in its ETFs are custodied by BNP Paribas Australasia. I'm a pretty new at all this but I've had some ETFs from Smartshares since the start of the year (nz50, emerging markets, us 500 and aus dividend). This breakeven point is around $20,000. Overtime the benefit of Vanguard’s low fees will really payoff. I can only speak from experience and I have been loving the ease of the stake platform. One assumption I’ll use for this example, but feel free to change, is that you have monthly contributions through hatch, this is because you want to trade less frequently while still contributing to your investment. You’d be investing 20,800 a year and have FX fees of $104 NZD, add to this $144 NZD to get $248 in total fees to Hatch. I am after the Vanguard funds too. (https://www.smartshares.co.nz). For this example I will use the S&P 500. Would I be better to lump transfer that money into the Hatch VOO investment but keep up the regular savings plan to Smartshares? Kiwi Wealth is a regulated entity – it's a default KiwiSaver provider and part of the Kiwi Group Holdings Limited financial services group, which is owned by NZ Post, The NZ Super Fund and ACC. I can understand a few days difference but with competition now from Stake, Hatch to other providers, I would expect the process to be quicker than wait for a long time. Yes it is for me. Or is that just for foreign ones? If you want to invest in alternatives iShare funds than what’s on offer from Smartshares through Investnow, and SuperLife, and you had a large chunk of change to invest, I would suggest Hatch. Vanguard funds not available through InvestNow (eg VOO, VT, etc) are slightly cheaper over the long run to buy through Stake/Hatch. $248 / 0.34% gives us $73000 with rounding, so you need around $70,000 for Hatch to start to break even, excluding tax. Smartshares looks after all tax obligations for you, so you don't have to file a tax claim as you would if you owned any US shares directly. China, India, Brazil, Indonesia) Further Reading: – Smartshares vs Vanguard vs AMP – International Share Index Fund shootout. Fact: In the long-run using Hatch to own directly through Vanguard is better. What can I invest in with Hatch? They have low minimum investment amounts, … People with Hatch accounts can invest in a wide range of US-listed shares. A place to discuss personal finance for New Zealanders. Jul 26 Smartshares NZ Top 50 vs S&P/NZX 50 Ruth. Sharesies offers the lowest fees for share trades up to $3,000 given there's no minimum transaction fee. over $10,000), but is the most expensive for smaller trades. A value-add is that it enables investors to buy fractions of shares/ETFs. This is because you are investing in a PIE that invests overseas, and they are forced to use the FDR to calculate tax, which is passed on to the investors in the ETF. Now if you add the tax advantage for being under $50,000. Press question mark to learn the rest of the keyboard shortcuts, https://old.reddit.com/r/PersonalFinanceNZ/comments/fy5cp1/stake_vs_hatch_fees_explained/fmz1y57/. If you’re doing a Sharesies vs InvestNow comparison, you’ll be interested to learn that both providers provide access to managed funds. Hatch, Index Funds, Investment, KiwiSaver, PocketSmith, Sharesies, Sharesight, Simplicity, SmartShares, ETF, Tax With so many new investment platforms coming on stream in the last couple of years, it has never been easier to buy a stake in a company via either an index fund or by buying individual shares. Your money is safe, as it is held separately by the Custodian. Hatch has already welcomed Uber, Lyft, Slack, Pinterest, Beyond Meat, Chewy, Airbnb and Zoom (and many others!). I can't attest to the quality of investment inside Smartshares, and whether they are riding the wave of global market growth vs really doing something. Hatch gives Kiwis easy access to the United States sharemarket, and with this access comes the opportunity to invest in 754different US domiciled ETFs!!! Smartshares funds are listed on NZX so you … A place to discuss personal finance for New Zealanders. Which is represented by Smartshares U500 (USF) on InvestNow and VOO on Hatch. The tax and fees difference will have a far greater effect than a day or 3 price movement. ... Read our Comparing Sharesies vs Investnow vs Hatch and more guide. The businesses behind Hatch It’s safe as the decisions you make. I'm came across this subreddit while doing some research into Hatch. This section will look at the different options from each issuer. Hatch: Costs 0.03% per annum, and you pay $8 USD per trade, and you are paying 50 basis points in FX fees ($5 per $1000 exchanged). Smartshares is in my opinion a lot safer than Hatch, Stake or Sharesies as these guys keep your shares/funds in overseas custodial services, whereas Smartshares is local. Will I earn dividends directly from owing a fund through Hatch or Stake? Hands down, InvestNow offers a lot more investment opportunities than Simplicity (3 funds) and Smartshares (40+ ETFs). New comments cannot be posted and votes cannot be cast, More posts from the PersonalFinanceNZ community. In this video I'll be looking at the two main DIY investing platforms in New Zealand, Sharesies and Investnow. Hatch, Index Funds, Investment, Kids and Money, PocketSmith, Sharesies, Simplicity, SmartShares, ETF Christmas at my house when I was growing up was always a busy, crowded and fun time. ), just add money to Hatch via internet banking. If you had an opening value of $100, you are paying tax on $5 (5% through FDR), and will pay PIR x $5, which at 0.28% is $1.4. Sharesies vs ASB Securities vs Direct Broking vs Hatch Direct Broking offers the best value fees for big trades (i.e. That makes me a little uncomfortable. We used to receive heaps of Christmas cards and the most exciting ones were the cards that contained the “annual Christmas letter” from the sender. Invest in environmentally and socially responsible global equities, megatrends and passive global bonds for the first time with Smartshares. Here is a helpful breakdown of Hatch v Stake that people much smarter than me put together: https://docs.google.com/spreadsheets/d/1mbCDBYvCpgHzrz24f9rc9P8tAiV1l08xHrdcA50dbFM/edit#gid=0, and here is my founders code if you want to check out stake: JENNIFERT982. See the Stake/Hatch comparison here: https://old.reddit.com/r/PersonalFinanceNZ/comments/fy5cp1/stake_vs_hatch_fees_explained/fmz1y57/. You will need to calculate things for yourself for your own investing situation. Should I be looking to move to investnow? The Smartshares NZX-50 Index fund can be swapped for the AMP capital NZ shares fund. Best For: Investors looking for US-listed shares or ETFs not otherwise available to New Zealanders via InvestNow or SmartShares. They do not manage your funds – instead they act as a “middleman” between investors and Fund Managers. Who is Hatch Suited to? Levicap you seem pretty clued up: I invest $60 pw into the USF and through the Smartshares regular savings plan as it is only the fund charge that i pay (0.34%pa). Hi all, I'm investing exclusively on smartshares ETFs. However my question is would I just be better of putting my 500 - 1k into a ETF on Smartshares instead? Is speed an important factor when purchasing mutual funds? In saying that it is now built up close to the $10,000 mark. Hatch/Stake do not, they just give you cash. ETF, ETFs, Hatch, Index Funds, Kernel, Money Education, Sharesies, SmartShares. Let’s assume you were investing $400 a week in InvestNow, so you invest $1600 a month through Hatch. Press question mark to learn the rest of the keyboard shortcuts. Smartshares, Vanguard, and AMP Capital, all issue, low cost, passively managed funds that invest in international shares. From what I am aware, buying mutual funds from Smartshares which in turn subscribes to issuers such as Vanguard is a slow process? Overtime the benefit of Vanguard’s low fees will really payoff. It created New Zealand’s first ETF (the NZ Top 10 Fund) in 1996. InvestNow and Smartshares complete trades in under 2 working days. InvestNow costs: 0.34% per annum, and you pay 28% on 5% of opening value as tax. That way each time it builds up I can transfer over to the hatch VOO at 0.03% instead of the USF 0.34%. They charge an admin fee, but have a nicer front end than NZX and are a little more flexible. Index fund fees explained: Index fund fees are shown as a percentage of your investment and charged as an annual fee: So as an example- say you invest in a fund that has a fee of 0.10%, this means that you pay $1 per year for every $1,000 invested. Deposit money . Hatch charges .5% of the interbank FX fee. If you had over $50,000 you’d be paying anywhere between 0% and 5% tax through the FDR or CV tax methods. Looking through the past history of VOO about 25% of the years you’d be paying 0% tax on opening value, you can also run simulations using means and standard deviations of the historic index returns and get similar findings. I guess if I buy funds through Hatch or Stake, I will directly own the mutual fund as opposed to Smartshares which have a mutual fund product invested in Vanguard, say such as the S&P index based fund. I was looking at hatch recently because you can choose individual shares and want to invest in renewable energy, especially with the UK going coal free (albeit briefly) for the first time since the industrial revolution and more focus on renewable power it seems like a smart investment. The Hatch option could be more cost-effective for investors who make fewer and/or higher value trades. InvestNow and Smartshares is cheaper for smaller portfolio’s, but Hatch is better for large portfolio’s where the broker and FX fees become relatively small. Some of the ETF issuers are (click each o… I would crack straight into answering her question about the SmartShares vs SuperLife comparison but first I needed to duck down to the supermarket to buy some toothpaste (despite the fact I spent an hour at the supermarket the day before doing the biggest shop I have done all year). The Smartshares range of ETFs includes socially responsible international equity exposure, access to Robotics & Automation and Healthcare Innovation ‘megatrends’, and passive global bonds. Other asset characteristics Ethical funds This is high tax. The difference is both in fees you paid and compound interest lost. New comments cannot be posted and votes cannot be cast, More posts from the PersonalFinanceNZ community. 2. Would it be better to buy US mutual funds through Hatch or Stake NZ instead? Press J to jump to the feed. A quick note on Index fund fees. But the point about having a large tax advantage below $50,000 is important, as well as the fact you need a larger portfolio before Hatch’s brokering and FX fees being less than the management fee from Smartshares. Examples are the Smartshares US 500 ETF (investing in the United States), Smartshares Emerging Markets ETF (investing in emerging markets e.g. The initial currency conversion fee and trade fee might sting a bit- but over the long term, the lower fund fees offered by iShares could make it cheaper. Smartshares charges a $30 setup fee when you first apply, while annual management fees vary depending on the fund you choose and range from 0.20% to 0.75%. Exchange Traded Funds (ETFs) are, in almost all cases, index funds, except investors buy and sell their holdings on a sharemarket. Up I can only speak from experience and I have been loving the ease of the keyboard shortcuts https! 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