Hatch Review

Updated 8 January 2021

Our Review
In this guide, we outline what Hatch is, its features, fees, FX conversion rates and how it differs from other overseas share investing platforms such as Stake and Sharesies (for US-listed shares and ETFs). We also compare it to established alternatives such as ASB Securities and ETF platforms like InvestNow. 

Our review covers:

• Hatch Pros & Cons
• ​The Bottom Line 
• ​Limitations
• Who is Hatch Suited to?
• ​Fees
• The Specs of Hatch
• Hatch - What You Need to Know
• Hatch started in 2018 – can I trust it and is it safe for me to invest?
• What Others Are Saying
• The Competition - ASB Securities, ANZ Securities and Others
• 5 Things to Know About Hatch

Want to compare Hatch with Stake? Our Hatch vs Stake guide does this in detail.

Please note: MoneyHub is not a Financial Adviser, and this guide has been published to explain Hatch and outline the pros and cons of the platform as an investment option.

Related Resources:

• Do You Want to Invest in the US Stock Market from New Zealand? Our detailed guide explains everything you need to know.
• ​Do You Want to Compare ETFs with Shares? Our dedicated ETFs vs Shares guide has you covered.​

Want to compare Hatch with Sharesies with and Stake for US Shares? Visit our comprehensive guide​

START INVESTING WITH HATCH, OR LEARN MORE

Hatch - Pros & Cons

Pros

• Easy to use interface, with 3,000+ investment options in the US market. 
• Option to buy partial shares, for example 0.65 of one Google share, or 0.40 of one Apple share etc, as well as buy/sell shares in whole dollar amounts. For example, buying $10,000 in Amazon which translates to 6.1350 shares.
• US tax obligations are taken care of at source (an annual $0.50 fee per account applies for US tax reporting).
• Data for NZ tax obligation information for investments are provided by Hatch, allowing customers to complete their income tax return or work with their accountant efficiently.
• Much lower FX fees and brokerage commissions compared to incumbents ANZ Securities and ASB Securities.
• Limit orders - you can buy shares at a set price or set an alert to when the share falls to that level. Hatch lets you enter the exact number of shares you want and the price you want to pay for them (e.g. 5 shares at $50 each). If the market price matches yours or goes lower, your order will be filled.
• Trust accounts: Family trusts can easily add US shares to their investment portfolios. 
• Browse by Megatrends: Browse the companies and ETFs at the forefront of the industries of the future  .
• Auto-invest: Choose how much and how often you want to invest.
• Getting Started Course: Hatch has created a simple online course covering the basics of investing and there's a Hatch investors Facebook group for questions.
• Stop-loss orders – Hatch offers stop-loss; if you want to automatically sell shares when the price reaches a certain level (known as a 'target price'), Hatch allows this.​

Cons

• No app - Hatch has stated they will develop one if there is demand, but right now clients will invest via the website and they suggest saving the website icon to your homescreen. 
• Support is online only, and limited to the hours of Monday to Friday, 9am to 5:30pm, although their FAQs are thorough and in our experience the live chat and email replies were very responsive.
• No joint-accounts offered (Hatch has informed MoneyHub that this feature is being scoped).
• No other foreign markets offered (i.e. UK, Germany, Australia) but investors can access ADRs, foreign shares listed on the US share markets. 
• Good Faith Violation rules (read the policy here) limits any day-trading or inter-day trading. If you sell one parcel of shares and buy new shares on the same day, you must wait at least 3 working days before selling them due to the cash being 'unsettled'.
• No hedging options - unlike many New Zealand ETF investments available through Sharesies or Simplicity, Hatch does not provide any foreign currency hedging. This means if the NZD goes up against the USD, and all other things being equal, the NZD value of an investment will be less due to the USD being worth less.

Must-read Hatch-related guides

1. Want to compare Hatch with InvestNow, Sharesies and other platforms? Read our Comparing Sharesies vs Investnow vs Hatch and more guide. ​
2. Worried about what happens to your investments if Hatch collapsed or shut down? Our easy to read custodian guide explains what you need to know. 
3. Wanting to invest in the US Stock market from New Zealand? Our guide explains everything you need to know.​
4. Want to learn about ETFs? Our ETFs guide has you covered. 
5. Want to compare ETFs with shares? Our dedicated ETFs vs Shares guide has you covered.

START INVESTING WITH HATCH, OR LEARN MORE

​The Bottom Line

• ​Hatch offers a tremendous number of options for exposure to US-listed shares and ETFs, unrivalled by any other New Zealand-based platform.
• The platforms works best for investing $100s or more at a time, as they include a 0.5% fee in the FX rate to exchange your NZD to USD, and a flat $3 USD an order, to buy or sell up to 300 shares (then it’s $0.01 a share).
• Investors will need to plan and have available funds ready in advance to buy shares or ETFs - foreign currency translations happen overnight, instant funding of an account is not an option but Hatch has informed MoneyHub that this feature is being scoped.  
• There are no custodial fees for investments and you won't pay any account management fees.
• Many New Zealand investment platforms and fund managers limit access to unethical investments - Hatch has no such limitations. They also have a much larger array of funds than accessible locally, to suit investor preferences for anything from robotics to clean energy and the future of food

Hatch offers share price graphs, earning information and a company description for every investment option

Limitations

• ​FX fees - 0.5% on the interbank rate is lower than banks and often the lower than online currency conversion tools. Hatch has also confirmed they provide discounts for deposits over $100,000. Hatch gives the following example:

1. Base exchange rate (Interbank rate): 1 NZD = 0.67 USD
2. Hatch rate: 1 NZD = 0.6667 USD (0.67 - (0.67 * 0.005)
3. We calculate the FX margin at 0.49% on the transaction above (1-(0.6667/0.67)=0.00492)
   Using this example, if you deposited $10,000 the Hatch exchange rate would be 0.6667 resulting in $6,667 USD.

Who is Hatch Suited to?

• Best For: Investors looking for US-listed shares or ETFs not otherwise available to New Zealanders via InvestNow or SmartShares.
• Not suitable for: Passive investors investing less than $100-200 at a time. A $3 USD fee is only the price of a cup of coffee, but investing a little more gives you better bang for those bucks. Hatch offers a simple way to keep fee percentages low by allowing auto-investments into all 3,000+ companies and ETFs. Passive investors can deposit small amounts when it suits, then set a timeframe and amount to invest at regular, automated intervals.

Must-read Hatch-related guides

1. Want to compare Hatch with InvestNow, Sharesies and other platforms? Read our Comparing Sharesies vs Investnow vs Hatch and more guide. ​
2. Worried about what happens to your investments if Hatch collapsed or shut down? Our easy to read custodian guide explains what you need to know. 
3. Wanting to invest in the US Stock market from New Zealand? Our guide explains everything you need to know.

START INVESTING WITH HATCH, OR LEARN MORE

Full Review

Hatch Fees

Hatch charges two fees - a brokerage fee (for the purchase or sale of shares and ETFs) and an exchange rate fee (for converting NZD into USD to fund your account, and from USD to NZD when withdrawing money from your account). 

1. Hatch’s brokerage fees are clearly stated:

• US$3 an order, to buy or sell up to 300 shares, then it’s $0.01 a share

2. Hatch’s exchange fee is 50 bps or 50 pips.

• If the interbank exchange rate was NZ$1 = US$0.7000, an investor would receive US$0.692 for every dollar they invested. A walkthrough of Hatch fees explains this in detail:

1. Investor A wants to buy NZD 1,000 in Walmart shares, priced at USD 100 each. Investor A transfers their NZD to their Hatch account when the interbank NZD:USD exchange rate is 0.70. The investor receives 0.695 USD per NZD (deducting the 50 pips/bps) and receives USD 695.00.  
2. Investor A then puts an order in for Walmart shares with the available balance. The brokerage fee of USD 8 is charged for the purchase, and Investor A receives 6.8700 Walmart shares (valued at USD 687.00).
3. When Investor A wants to sell the shares they will pay another USD 8 for brokerage. The USD value will then sit in Investor A's Hatch balance.
4. If and when Investor A wants to convert the USD balance back into NZD (as opposed to re-investing it), there is a fee to do this. If the interbank NZD:USD exchange rate is again 0.70, the investor will have the balance transferred at a rate of 0.705 (adding 50 pips/bps). For a parcel of shares valued at USD 700 this would calculate to be a NZD 8 fee).
5. Hatch investors ultimately benefit from economies of scale - the higher the value of an individual share purchase, the lower the brokerage fees are proportionately on the share parcel.

Must-read Hatch-related guides

1. Want to compare Hatch with InvestNow, Sharesies and other platforms? Read our Comparing Sharesies vs Investnow vs Hatch and more guide. ​
2. Worried about what happens to your investments if Hatch collapsed or shut down? Our easy to read custodian guide explains what you need to know. 
3. Wanting to invest in the US Stock market from New Zealand? Our guide explains everything you need to know.

START INVESTING WITH HATCH, OR LEARN MORE

​​The Specs of Hatch & How it Works

1. Signing Up

• Hatch is open to anyone over 18, residing in New Zealand as a tax resident and holding either a New Zealand passport or driver’s license.
• Hatch complies with US and New Zealand law by asking for a number of personal details, specifically your employment status, annual earnings, how much you expect to invest, and how frequently you expect to invest. 
• Once Hatch verifies your information, your account will be approved (usually immediately) and you can deposit money. 

2. Depositing Money

• Hatch only accepts bank transfers - customers deposit New Zealand dollars to a Hatch trust account where they are exchanged into US dollars. No balances are held in NZD. The exchange rates are made clear before you transfer any money - we talk about fees below.
• Hatch exchanges money every business day around 2pm – so if you deposit before 12pm, your money usually hits your Hatch account first thing the following morning – often before the US markets open. If you deposit on a Friday after 3pm, you'll wait until the following Monday for your money to be exchanged.
• Once your Hatch account has received the US dollars, you can start investing.
• Conversely, if you want to withdraw money out of Hatch, because the balance is in USD it can take up to 3-4 days if you miss the daily exchanges between Monday and Friday. Hatch will otherwise exchange the money within 24 hours and deposit it into your NZD bank account.
• Within your Hatch account, any uninvested money is transferred into the Federated Investors Money Market Fund, offering a low-risk cash deposit (with an annual pre-tax return of around 1.00%). The fund is rated AAA by Standard & Poor's, Moody's and Fitch.​

Funding a Hatch account can only be done by bank transfer.
Disclaimer: The above image is from Hatch's webapp, accessed via a browser (although it appears similar in appearance to an app). Hatch does not offer a stand-alone app. 

3. Buying Shares

• The US share markets open between 9:30am - 4pm Eastern Time (1:30am - 8am NZ time in summer and 3:30am - 10am in winter).
• Purchasing shares is straightforward; click on the share or ETF you want to buy, select your order type and quantity and confirm the order. Once the order is processed and you own the shares, brokerage fees are deducted.
• When you place an order, Hatch estimates how many shares you’ll get. If the share price changes before your order is completed, the number of shares you end up with might be different. For this reason having a buffer balance to avoid a rejected purchase if the price and quantity of shares exceeds the money available.
• If you place an order for shares when the US markets are closed it will be processed when the market reopens. The closing price today may not be the same as the opening price tomorrow given market factors so you may receive more or less shares than anticipated.
• Hatch offers a Transaction History report which gives you details of every deposit, withdrawal, and order. It also shows you every fee you’ve been charged, including tax reporting fees.
• Hatch works with two partners, DriveWealth (a US-regulated broker-dealer) and World First (an Australian-based currency exchange provider).

4. Future Trading and Keeping Track of Your Portfolio

• When you log in to Hatch, you can view all the shares and ETFs holdings you own, as well as their respective market prices. You can also download monthly account statements.

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Hatch - What You Need to Know

The claim:
"Hatch provides access to over 2,900 companies and over 900 ETFs (Vanguard, BlackRock, Invesco, State Street) that are listed on the NYSE and NASDAQ via our US regulated broker-dealer. The shares are priced over $1 and companies have a minimum market cap of $1B".

AND

"Hatch gives you access to full and fractional shares in individual companies and Exchange Traded Funds (ETFs) listed on the US share markets". 

Is it true?

• Yes, currently 3,242 investment options exist and are helpfully categorised by industry, specifically Biotech, Communications, Construction, Consumer goods, Energy, Entertainment, Finance, Healthcare, Industrial, Manufacturing, Minerals & mining, Real Estate, Retail & fashion, Space and exploration, Technology, Transport and Utilities.

The claim:
"To simplify investing for New Zealanders by giving them access to tools and products they need to build their financial futures. We’ll start by giving savvy investors access to the US share markets".

​Is it true?

• Yes, while Hatch was originally a bit thin on 'tools', it has now added these to the platform and it certainly lives up to its marketing when it comes to open access to US shares.

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Hatch presents live share price information when the US markets are open

Hatch started in 2018 – can I trust it, and is it safe for me to invest?

• Trading platforms come and go, so it's perfectly reasonable to be cautious about investing overseas with a platform that is new to the market. The good news is that Hatch is 100% owned by Kiwi Wealth Ltd, which is a sister company of Kiwibank. Both are members of the Kiwi Group Holdings.
• The other important factor is that despite the pedigree of its underlying owner, the shares you purchase are ultimately held by overseas institutions.
• Moreover, Hatch is not registered as a 'financial product' by the New Zealand Financial Markets Authority due to the fact it only provides access to trading opportunities in the US Share markets. Specifically, Hatch partners with DriveWealth, a broker-dealer regulated by FINRA (the Financial Industry Regulatory Authority), which is similar to the FMA although it is a private corporation (not a government organisation) and acts as a self-regulatory organisation (i.e. federal laws do not govern it).
• Confusing matters slightly, Drivewealth does not hold your securities. Electronic Transaction Clearing, Inc (ETC) custodies your shares. ETC is headquartered in New York City. Hatch is clear in saying you own your shares, but your name does not appear on a share certificate like it would if you purchased shares on the NZX.
• In summary, Hatch or its parent company Kiwi Wealth Ltd does not hold your shares and investors must be comfortable relying on standard practice in the US of “held in street name”.

What Others Are Saying
"​Hatch’s point of difference is that it enables investors to buy portions of expensive shares like those of Berkshire Hathaway, which at the time of writing were priced at US$328,500. So instead of an investor going out and saying, ‘I want to buy X number of shares in Company X.’ they can say, ‘I want to invest X amount of dollars in Company X. Hatch doesn’t require a minimum investment. However its fee structure is such that it’s more economic to make larger trades".
- Jenée Tibshraeny, Interest.co.nz, September 2018

Hatch gives easy access to (Shares) and Exchange Traded Funds (ETFs) on the US markets. While it has been easy for many years to buy books online, the same had not been true of shares.
- Rob Stock, Stuff.co.nz, September 2018

"The online platform is targeted at existing investors who want control over where their money goes and have the time, interest and knowledge to manage their investments. The transaction can all be done online via an app through a mobile phone or desktop once a person has signed up for the service".
- Tamsyn Parker, NZ Herald, September 2018

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The Competition - ASB Securities, ANZ Securities and Others

Shares alternatives

• The biggest competitor to Hatch is Stake - our Hatch vs Stake guide compares the two platforms in detail.
• Outside of Stake, Sharesies offers US-listed shares and ETFs too. Like Stake, what platform is best will be determined by your investing profile as Hatch tends to favour those making larger-size investments (rather than trading frequently and/or investing small amounts).
• Hatch beats ASB Securities and ANZ Securities hands down for US share market purchases, but is not as competitive as international discount brokerage platforms like Interactive Brokers:
• ASB Securities - US share trades incur a 0.80% brokerage fee (with a minimum of US$50 per trade, plus agency fee of 0.4% with a minimum of US$40 per trade for orders up to US$50,000). The FX fees are around 1.50% on the spot rate per our ASB Securities review.
• Direct Broking - US share trades incur a 0.6% or US$69.50 brokerage fee (whichever is greater), then a US$500 minimum order value. The FX fees are around 1.50% on the spot rate per our ANZ Securities review.
• Interactive Brokers - Trading and/or foreign exchange fees are lower than Hatch, Stake or Sharesies, but there are ongoing fees. There is also more regulation around joining and we have covered the platform in detail in our Interactive Brokers guide. 

ETF alternatives

• Want to compare Hatch with Stake? Our Hatch vs Stake guide does this in detail.
• There are a number of US and global ETF options available to New Zealand investors without the need to translate NZD into USD. Many also have the benefit of offering currency hedging. 
• See Smartshares, Sharesies and InvestNow as examples. 

Must-read Hatch-related guides

1. Want to compare Hatch with InvestNow, Sharesies and other platforms? Read our Comparing Sharesies vs Investnow vs Hatch and more guide. ​
2. Worried about what happens to your investments if Hatch collapsed or shut down? Our easy to read custodian guide explains what you need to know. 
3. Wanting to invest in the US Stock market from New Zealand? Our guide explains everything you need to know.
4. Want to compare ETFs with shares? Our dedicated ETFs vs Shares guide has you covered.

5 Things to Know About Hatch

Hatch doesn’t provide any investment advice or investment information

Hatch is a financial platform and does not offer anything further than general guidance on tax and trading basics on its website. Hatch is not a financial adviser either. 

Hatch makes this clear on their website: "Hatch customers are prepared to do the research and take charge of their own financial education. They’re keen to learn as they go to be able to make better investment decisions themselves. They’re going to have to, because we’re not providing advice. Not one bit of it". 

You WILL be paid interest on uninvested USD balances

Hatch has picked the Federated Investors Money Market Fund for its overnight sweeping, meaning funds not invested will earn interest in a low-risk cash deposit. Recent returns have averaged 1.50%+ in recent years, but the drop in interest rates in 2020 calculate that the current interest rate is around 0.48% p.a. You can calculate the latest interest rate by deducting the 'Expense Ratio' (costs of running the fund) from the 'Dividend Indicated Gross Yield' (i.e. the gross interest earnings). The fund is rated AAA by Standard & Poor's, Moody's and Fitch.​ The interest rate is vastly superior than that offered by ASB Securities and Stake, which is 0% for all uninvested funds.

Dividends get paid back into your Hatch USD account

​If you've received an overseas dividend, it will be paid into your USD account. You can then decide to reinvest the sum or withdraw it into NZD. 

Hatch groups companies by a number of metrics to help with investment choices

Share and ETF sales do NOT convert back into NZD once sold

Unlike other platforms, and specifically ANZ Securities, selling investments does not trigger an automated conversion of the USD balance into NZD. This means investors can reinvest the balance or wait until the exchange rate is more favourable to make the conversion into NZD.

Know this: Unsettled Funds

• When you sell shares, the money you receive shows up in your Hatch account as soon as the order is completed. However, behind the scenes, it takes 2 full business days for the ‘actual’ money to change hands. During this time, the money you’ve received from the sale is considered ‘unsettled’.
• You can buy shares using that unsettled money straight away without any problems. However, if you sell those shares within 2 full business days (before the money you used to buy them settles), it’s considered a Good Faith Violation.
• This is because you’re selling shares (and maybe making a profit) from money you don’t ‘have’ yet.​

The Kiwibank Group is committed to the success of Hatch

Hatch is an initiative from Kiwi Wealth, a member of the Kiwibank Group and has the funding behind it to not only support it through its entry into the market, but also develop new features. In time it is hoped that the fees will fall as Hatch attracts new investors and trading volumes grow.

START INVESTING WITH HATCH, OR LEARN MORE

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Must-Read Hatch-related guides

1. ​Want to compare Hatch with Stake? Our Hatch vs Stake guide does this in detail.
2. Want to compare Hatch with InvestNow, Sharesies and other platforms? Read our Comparing Sharesies vs Investnow vs Hatch and more guide. ​
3. Worried about what happens to your investments if Hatch collapsed or shut down? Our easy to read custodian guide explains what you need to know. 
4. Wanting to invest in the US Stock market from New Zealand? Our guide explains everything you need to know.
5. Want to learn about ETFs? Our ETFs guide has you covered. 
6. Want to compare ETFs with shares? Our dedicated ETFs vs Shares guide has you covered.

Do you have an experience with Hatch you would like to share with our users? Email our research team who would be delighted to hear from you.