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Australian Investment Funds for New Zealanders - The Definitive Guide

Discover the best Australian share funds for NZ investors - we look at tax-effective growth funds from Pie Funds, Kernel, Milford, Smart and more. Avoid FIF tax complexity, access ASX giants and diversify beyond the NZX and US markets - our guide highlights fees, returns and tax advantages.
Updated 30 September 2025

Summary
  • The Australian sharemarket offers New Zealand investors what the NZX cannot: scale, sector diversity, and exposure to the Asian growth story - our guide lists the funds available to New Zealand investors.
  • With a market capitalisation over ten times larger than New Zealand's (the ASX totalling A$1.6 trillion, whereas the NZX totals NZ$164.7 billion as of 2024), the ASX offers huge exposure to global mining giants feeding China's economy, banks with operations across Asia-Pacific, healthcare companies developing cutting-edge treatments, technology firms competing on the world stage, and a dynamic small cap sector.
  • Despite the size of the market, many New Zealand investors either ignore Australian shares entirely or make costly mistakes when accessing them.
  • Direct share purchases of shares can trigger complex tax calculations unless the companies are exempt from FIF.
  • An alternative, and increasingly popular approach, is to use PIE funds specifically designed for Australian exposure. These Australian-specific funds target ASX-listed companies, eliminating tax and administrative tasks.

Our guide reveals exactly how to invest in Australian shares efficiently, which funds offer the best value, and why getting the structure right matters more than picking individual shares. We cover:
Know This First: Understanding What Makes the Australian Market Different
The ASX is arguably a sharemarket that has everything the NZX lacks - so much so that the NZX struggles to attract new listings, and local growth companies like Xero have chosen to exit the NZX and list on the ASX.
  • Overall, resources and energy companies comprise 25% of the ASX's market capitalisation.
  • The "Big Four" banks - Commonwealth (owner of ASB), Westpac, ANZ, and NAB (owner of BNZ) - dominate financial services with combined assets exceeding AUD $4 trillion. Healthcare giants CSL and Cochlear export globally, while retailers like Woolworths and Wesfarmers control shopping from Brisbane to Perth.
  • This complementary exposure is important because Australian economic cycles often diverge from those of New Zealand. When commodity prices boom, Australian miners and energy companies soar while New Zealand companies feel the pinch of higher input costs. When China stimulates its economy, Australian resource companies benefit directly. This natural hedging effect can significantly smooth portfolio volatility.
  • Currency adds another dimension. The NZD/AUD exchange rate typically ranges between 0.80 and 0.95, which is far more stable than the NZD/USD movements.
  • Some funds hedge currency exposure back to NZD, eliminating exchange rate risk but also removing potential gains from AUD strength. Others remain unhedged, accepting currency volatility for the potential of higher returns.

Important: General Disclaimer
  • Funds listed are for illustration; tax benefits depend on IRD rules and your situation - please seek advice. 
  • MoneyHub provides this guide for informational and journalistic purposes only and does not constitute personal financial advice, investment advice, or a recommendation to buy, sell, or hold any financial product, including KiwiSaver funds, investment funds or other investment options.
  • The funds or schemes highlighted on MoneyHub are selected based on historical performance data (e.g., from Morningstar or similar sources), fees, structure, and general market observations. Past performance is not a guarantee of future results.
  • Any opinions, preferences, or "favourite" designations reflect the editorial views of MoneyHub and are not guarantees of future performance. Past results are not indicative of future returns, and all investments carry inherent risks, including the potential for capital loss.
  • MoneyHub is not a financial adviser under the Financial Markets Conduct Act 2013, and we are not regulated by the Financial Markets Authority (FMA) to provide personalised financial advice. Readers should seek independent advice from a qualified, licensed financial adviser or use official tools before making any investment decisions. We strongly recommend considering your personal circumstances, risk tolerance, and financial goals, and consulting a professional to assess suitability.
  • The information in this guide is based on historical data and may become outdated as a result. We do not accept liability for any loss or damage (including consequential loss) arising from reliance on this content, errors, omissions, or changes in market conditions. While we strive for accuracy, market data and fund performance can fluctuate. We encourage regular review of official fund reports or consultation with providers to ensure accurate information. 
  • MoneyHub may have commercial arrangements with certain schemes or providers for general promotional purposes. However, fund selections are based on merit and editorial judgment, not payment. For the latest details, contact the relevant fund provider directly.

How PIE Funds Simplify Australian Share Investing and Avoid FIF Tax Complexity

​When investing in Australian shares through a Portfolio Investment Entity (PIE) fund, you gain a powerful but often overlooked advantage - complete exemption from Foreign Investment Fund (FIF) tax rules – even for Australian shares that wouldn't normally qualify for exemption (as outlined by the IRD here).

Direct investment in ASX-listed shares can create unexpected tax complications, as not all Australian shares automatically escape FIF rules. To qualify for exemption, companies must:
  • Be Australian tax residents
  • Maintain franking accounts
  • Meet other specific criteria

Many ASX-listed investments don't qualify, including:
  • Real Estate Investment Trusts (REITs)
  • Dual-listed companies
  • Companies incorporated outside Australia
  • Entities without franking accounts

When you hold non-exempt shares directly and exceed the $50,000 FIF threshold, you face complex year-end tax calculations and additional compliance requirements.

The PIE Fund AdvantageInvesting through a PIE fund eliminates these complications entirely:
  • Complete FIF exemption – The PIE fund itself is exempt from all FIF tax rules on foreign investments
  • Simple taxation – You pay tax only on distributions and capital gains at your PIR rate (maximum 28%)
  • No threshold concerns – The $50,000 FIF threshold becomes irrelevant
  • No compliance burden – No year-end FIF calculations or additional tax forms
  • Broader investment options – Access Australian companies that wouldn't qualify for FIF exemption if held directly, without any tax complexity

This structural advantage means PIE funds can efficiently hold a diverse portfolio of Australian investments – including REITs, dual-listed companies, and other non-qualifying entities – while keeping your tax affairs straightforward.

For more information on FIF rules and exemptions, visit the IRD's official guidance on Foreign Investment Fund rules. Our guide to tax on investments also has further information. 

Popular Australian Share Funds Available to New Zealand Investors

These are examples of PIE funds, not recommendations, with no guarantee of future results. ​All funds listed below are PIE-structured, ensuring tax efficiency with rates capped at 28%, compared to up to 39% for direct share ownership.

​Important: Australasian Funds Can Include New Zealand SharesWhen evaluating funds targeting the Australian market, it's crucial to understand the difference between "Australian" and "Australasian" funds:
  • Australian funds invest exclusively in ASX-listed companies.
  • Australasian funds can invest across both the ASX and NZX, giving fund managers flexibility to find the best opportunities in both markets

For example, Pie Funds' Australasian Growth Fund primarily focuses on Australian shares but maintain the flexibility to invest in New Zealand companies when compelling opportunities arise. Currently, their NZX exposure is typically less than 5% of the portfolio, but this can vary based on market conditions and opportunities.

Our view is that this flexibility can be advantageous - fund managers can pivot between markets to capture the best growth stories, whether that's an emerging Australian biotech or a high-growth New Zealand technology company. However, if you're determined to only invest in Australian-listed companies, you'll need to check a fund's current geographic allocation before investing.

We have grouped our shortlist of funds into actively managed and those that are index-based:

1. Actively Managed Australian Funds

Pie Funds Australasian Growth Fund (1.85% p.a.)
  • Our View: This is one of New Zealand's top-performing Australasian equity funds with a remarkable 14.90% p.a. return since inception (2007) as at 31 August 2025. The fund focuses on smaller companies across both markets where pricing inefficiencies create opportunity.
  • Minimum investment: $25,000
  • More details: Pie Funds Australasian Growth Fund, or read our Pie Investment Funds review

Pie Funds Australasian Growth 2 Fund (1.85% p.a.)
  • Our View:  Launched in 2015 as a complement to the original Growth Fund, targeting small and medium-cap companies with high growth potential and a 12.90% p.a return since inception (2015) as at 31 August 2025.
  • Minimum investment: $25,000
  • More details: Pie Funds Australasian Growth 2 Fund, or read our Pie Investment Funds review

Milford Australian Absolute Growth Fund (1.05% p.a.)
  • Our View: Milford's flagship Australian fund takes concentrated positions in 20-40 high-conviction stocks, often deviating significantly from index weights. The fund can hold up to 50% in cash during defensive periods and utilises derivatives for protection, and has a 7.78% p.a return since inception (2018) as at 31 August 2025.
  • Minimum investment: $1,000
  • More details: Milford Australian Absolute Growth Fund

Fisher Funds Australian Growth Fund (1.47% p.a.) plus a performance fee - 10% of returns in excess of the "Official Cash Rate + 5%", subject to a high water mark. Capped at 2% of the Australian Growth Fund's average net asset value per year.
  • Our View: Targets mid-cap growth companies overlooked by larger funds, typically holding 30-40 positions. Fisher's Australian team operates from Sydney with on-ground research capabilities, delivering strong outperformance during growth markets.
  • Minimum investment: $2,000
  • More details Fisher Funds Australian Growth Fund

Other options, not reviewed in detail, include:

2. Index and Passive Australian Funds

Kernel Australia 100 Fund (0.25% p.a.)
  • Our View: Comprehensive exposure to Australia's top 100 companies at rock-bottom fees. Tracks the S&P/ASX 100 index, capturing 85% of total ASX market capitalisation.
  • Minimum investment: No minimum
  • More details: Kernel Australia 100 Fund, or read our Kernel Funds review

Smart Australian Top 20 ETF (OZY) (0.60% p.a.)
  • Our View: Listed on NZX, trades like a share during market hours, and provides concentrated exposure to Australia's 20 largest companies. Real-time trading and transparent daily pricing, albeit with higher fees compared to unlisted alternatives. 
  • Minimum investment: One unit
  • More details: Smart Australian Top 20 ETF, or read our Smart review

The Bottom Line

  • Australian shares arguably deserve a place in every New Zealand investor's portfolio, not as speculation, but as a strategic diversification. The ASX offers what the NZX fundamentally cannot - genuine sector diversity across mining, energy, and global healthcare; scale with companies 10-50 times larger than NZ equivalents; a dynamic small cap sector​ and direct exposure to Asian economic growth through commodity and financial services links.
  • The critical decision isn't whether to invest in Australian shares, but how. Direct share purchases through platforms like Sharesies or Tiger Brokers seem appealing, but can create tax issues - PIE funds solve this by handling franking credits automatically, capping tax at 28% regardless of your income, and eliminating FIF compliance burdens.
  • For most investors, starting with a low-cost index fund, such as Kernel's Australia 100 (0.25% p.a.), provides instant diversification across 100 companies for less than the cost of a single trade on most platforms.
  • Investors seeking above-market returns are drawn to managers like Pie Funds, whose Australasian Growth Fund has delivered 14.90% per annum since 2007 - although past performance does not guarantee future returns.

Frequently Asked Questions

Why should I invest in Australian shares when I can just buy New Zealand companies?

The NZX represents just 0.2% of global markets and lacks entire sectors. Australia offers exposure to mining (BHP, Rio Tinto), energy (Woodside, Santos), global banking (CBA, Westpac), and healthcare innovation (CSL, Cochlear) - industries barely represented in New Zealand. When commodity prices surge or China stimulates, Australian shares often outperform while NZ companies face higher input costs.

Should I buy individual ASX shares or invest in Australian-specific funds?

Unless you're investing under $50,000 total offshore and enjoy managing tax complexity, PIE funds arguably offer the best benefits. They handle franking credits automatically, cap tax at 28% versus up to 39% for direct holdings, and eliminate FIF paperwork. The small management fee (around 0.25% p.a. for index funds) is worth the simplification alone.

Active vs passive Australian funds - which is better?

Both have merit. Index funds like Kernel's Australia 100 (0.25% p.a.) guarantees market returns minus minimal fees. Active funds, such as Pie's Australasian Growth Fund, charge more (1.85% p.a.) but have demonstrated the ability to outperform in the past (but, as with any investing, this is not a guarantee of future performance).

Can I access small-cap Australian shares through these funds?

Yes. Pie Funds' Australasian Growth Funds, as an example, specifically target smaller companies where inefficiencies create opportunity. These funds have higher fees (1.85% p.a.) and volatility but offer exposure to tomorrow's blue chips today. We don't believe they are suitable for conservative investors or those with short-term financial needs.

What's the minimum investment needed?

This varies by fund and manager. Kernel has no minimum, whereas Pie Funds' $25,000 minimum suits larger portfolios. It's best to start with accessible options and dollar-cost-average as your wealth grows.

What are the hidden costs I should watch for?

​Beyond management fees, some funds may charge a buy/sell spread (typically 0.10% 0.30%), currency conversion movements if unhedged (which can add 0.5-1% round trip), and tax leakage from funds that don't optimise for NZ investors. Active funds may also incur performance fees; Fisher Funds, for example, charges 10% of outperformance above the OCR +5% for its Fisher Funds Australian Growth Fund, which could add an additional 1-2% in strong years.

Should I choose hedged or unhedged funds?

​Hedged funds mitigate currency risk but incur annual hedging expenses of approximately 0.30%-0.50%, thereby eliminating potential gains from AUD appreciation. Historically, the NZD/AUD has been relatively stable compared to NZD/USD. Unhedged exposure can act as a portfolio shock absorber - when global markets fall, the AUD often weakens against the NZD, cushioning your losses. Most long-term investors opt for unhedged Australian exposure, but what's right for you is a decision not to be rushed.

When is it actually better to buy ASX shares directly?

​Direct ownership makes sense if you're investing under $50,000 total offshore (avoiding FIF), want to hold specific companies for the long term, can utilise franking credits against your Australian tax obligations, or are comfortable with tax complexity. It's also preferable for sophisticated investors who want to exercise voting rights or implement specific strategies, such as options trading.

What specific risks should I understand? ​

Australian markets carry a concentration risk, as the top 10 companies represent 45% of the ASX 200. Commodity exposure refers to the higher volatility associated with China's economy and global resource demand. The banking sector's dominance (25% of the market) creates sensitivity to Australian property markets and interest rates.

How quickly can I access my money?

Most PIE funds offer T+3 settlement (three business days), though some, like Kernel, process withdrawals within 2 days. ETFs like Smart OZY can be sold immediately during NZX hours with T+2 settlement. During periods of extreme market stress, some funds may invoke clauses that allow for delayed redemptions, although this is rare. Always keep emergency funds elsewhere.
Disclaimer: The financial products featured on MoneyHub offer a curated comparison that may not encompass all features critical to your unique decision-making process, such as tax implications, risk appetite, or investment timeline, and may not align with your individual financial situation. MoneyHub accepts no liability for any losses arising from its use. 

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