InvestNow Review - making sense of the DIY investment platform

Updated 5 February 2021
Summary of InvestNow
  • The Wellington-based platform offers investment into 140+ managed funds from 25 well-regarded fund managers, with a platform fee of $0/year.
  • As of December 2020, the platform had more than $500 million under management. 
  • Annual fund fees (including performance fees) range from 0.20% to 3.02%, with many index funds offered.
  • Investments from $250 can be made into any fund, many funds run by big names such as AMP, Fisher Funds, Milford Asset Management and Platinum Asset Management making their funds available.
  • Children can join InvestNow, one of the few fund platforms to offer this.
  • InvestNow ultimately undercuts Sharesies and SmartShares with its $0 platform fee, as well as offering a choice of funds unrivalled in New Zealand.​​
  • InvestNow, now has the InvestNow KiwiSaver Scheme, with 28 managed funds from 9 expert fund managers to choose from, with no KiwiSaver administration fees.

Why do we like InvestNow? For many reasons:
  1. The 100+ fund choices, offering something for every investor type. 
  2. You won't pay any fees to InvestNow for using the platform. 
  3. InvestNow's market position allows it to attract exclusive funds for everyday investment - we see it as a win-win. 
  4. Ultimately, funds pay InvestNow to appear on the platform, but you don't pay anything extra, and going directly to a fund won't be cheaper regarding fund fees.
  5. Of course, InvestNow isn't for everyone, and you will need to know (or have a good idea) about what you want to invest in by doing your own research. We discuss this in more detail below.
InvestNow's Background
InvestNow launched in 2017 intending to offer Kiwis more options and greater transparency when it came to investing in managed funds. Since launching, the DIY-styled platform has grown to offer 149 different funds operated by 25 fund managers, investing locally and globally. InvestNow is unique in promising “no account or transaction fees”, a first for its kind in New Zealand.
 
Our Review
In this guide, we outline what InvestNow is, what funds they offer to the Kiwi investor and how InvestNow differs from other platforms. We also look at the fees involved in investing via InvestNow. Our guide covers:  
Please note: MoneyHub is not a Financial Adviser, and this guide has been published to explain the investment fundamentals and outline the pros and cons of InvestNow as an investment platform.​

Want to compare InvestNow with Sharesies, Hatch and other platforms? Read our Comparing Sharesies vs Investnow vs Hatch and more guide. 

Worried about what happens to your investments if InvestNow collapsed or shut down? Our easy to read custodian guide explains what you need to know. 

Want to know how to trade or invest in the NZX? Our NZX in a Nutshell guide explains what you need to know.
First Steps - What is an "index fund"?
  • An index fund (or "ETF") is a type of investment that is established to invest in or track the components of a market index, such as the New Zealand NZX50 (our largest 50 companies) or the Standard & Poor's 500 Index (S&P 500).
  • An index fund provides diversity in risk, as your investment is spread over many companies within the index, proportioned by the size of each company's market value.
  • The index fund benefits from low operating expenses and management fees because the fund must invest in the companies within the index and therefore doesn't need fund managers to make judgments or research in order to make the investments.
  • An index fund operates no matter the state of the markets, so as markets overall go up your investment is worth more, and vice versa.
  • An index fund is different from many other managed funds, which have investment managers working to predict market movements and make investments on your behalf to add value to your portfolio.

The Specs of InvestNow

  • ​Funds on offer: Currently, InvestNow offers 140+ funds from 25 different fund managers. The funds include passive, cash-based investments (bank deposits, bonds and government debt), index funds (investing in specific sharemarkets, such as New Zealand’s NZX50 and the American S&P 500. There are also a number of actively managed funds with specific industries such as property, mining and emerging markets. 
  • Diversity: The number of funds on offer gives an individual investor a wide choice when it comes to deciding about investing. At the same time, the choice could be overwhelming for a newbie investor. 
  • InvestNow has advised that they are working on adding retail bonds.
  • The InvestNow KiwiSaver Scheme: Launched in October 2020, the InvestNow KiwiSaver Scheme offers 28 managed funds from 9 expert fund  managers and no KiwiSaver administration fees. 

The fees are as followed: 
  • Annual fees for using InvestNow as a platform: $0, with no purchasing or selling fees either
  • Minimum Initial Investment: $250 for all funds, or $50 with regularly scheduled contributions​
  • Fund fees:  ​All but one of these funds charges a management fee, which ranges from 0.20% (Vanguard International Shares Select Exclusions Index Fund, Milford Cash Fund, Smartshares NZ Cash ETF (NZC) and Smartshares S&P/NZX 50 ETF (NZG)) to 2.57% (Fisher Funds Property & Infrastructure Fund, which includes a performance fee of 1.02% as of 31 March 2020.) 
  • Performance fees: Some funds charge them, others don't. It should not be assumed that a fund will charge the same performance fee every year, as the future performance of the fund cannot be predicted.

Investment Products include:
  • ‘Australasian Equities’ (42)
  • ‘Cash and Cash Equivalents’ (4)
  • ‘Commodities’ (1)
  • ‘Diversified’ (20)
  • ‘International Equities’ (50)
  • ‘International Fixed Interest’ ( 11)
  • ‘Listed property’ (11)
  • ‘New Zealand Fixed Interest’ (10)

​​If I buy a fund with InvestNow, am I buying a share on the sharemarket?
In most cases, the answer to this is yes. The majority of InvestNow funds invest in shares. Usually, the investments are diversified so you are protected if and when one or two investments don’t work out.

Risk
  • The 149 funds each offer a unique investment strategy. Some are low risk, some are medium risk and some are high risk. The returns/profit you make don’t necessarily depend on the risk you take. 
  • Not all funds are hedged to the New Zealand dollar. This means that if our dollar rises against any overseas currency and your fund is not hedged, the value of your investment reduces in NZD. You’ll need to check with the funds with regards to what (if any) hedging they have in place.​

Who is InvestNow Suited to?


  • ​​Best For: Investors looking for a value for money investment platform that doesn't carve off fees who also want their money with established and respected fund managers. The low minimum investment of $50-$250 makes the platform widely accessible, and the zero platform fees commitment means what you contribute is what you invest. 
  • Not suitable for: Certain investors looking to make individual investments in specific companies or industries, or investors looking for short-term buying and selling. Index funds don’t move that much in the short term. With most funds offered by InvestNow, you buy anticipating local and/or global markets to rise over time while being diversified enough to avoid losing money if one or two shares flounder.
  • Most suitable investor: Anyone looking to improve their understanding of capital market investing and can make regular contributions to build their investment over time. 

Standout Features:
  1. No account or transaction fees – this is the main draw to InvestNow. Other investment platforms charge establishment fees and/or annual fees; InvestNow does not. If you’re likely to invest in a number of funds, this could offer significant upfront and ongoing savings.
  2. Access to the Vanguard International Shares Select Exclusions Index Fund, a fund tracking companies but excluding investments in tobacco, controversial weapons and nuclear weapons, is available with an annual fee of 0.20%. This fund usually has a minimum investment of $500,000 AUD if purchased outside of InvestNow. 
  3. You can access funds which usually require a high initial investment. For example, Fisher Fund’s International Growth fund requires a minimum $2,000 initial investment. Mint Asset Management’s Australia New Zealand Real Estate Investment Trust has a $5,000 minimum investment. With InvestNow, you can get exposure to both of these funds for $250 which makes funds like these increasingly available to smaller investors.
  4. Flexible ongoing investing from $50 is perfect for newbie investors looking to get into sharemarket but not pay brokerage fees on individual trades. As the funds invest in shares, there is direct exposure to local and global markets. 
  5. The 149 funds offer a lot of diversity, but managed fees range so it’s important to be comfortable with what you’re investing in and making sure it represents value for money.
  6. The diverse number of funds means you can focus on particular industry sectors in specific countries, such as Australian property, New Zealand property and global emerging markets. 
  7. InvestNow also offer Term Deposits from a selection of 6 banks including ANZ, Bank of China, BNZ, China Construction Bank of New Zealand, Heartland Bank and SBS Bank. 
  8. InvestNow offers monthly fund performance reports which are updated around the 20th of every month. The reporting shows the previous month's top-performing funds, as well as a running leader board of 12 month performance. Subscribers will be sent the reports by email once published. InvestNow also recently implemented the Morningstar performance tool in their investor site – investors can easily view and compare the full historical performance of all funds offered by InvestNow. 

But be aware:
  1. To learn more about a fund, you’ll need to download its investor prospectus – these range in pages from 10-50 pages each, and is not particularly user-friendly to a newbie investor.
  2. Big institutional investment brands like AMP, ANZ and Fisher Funds, Milford Asset Management and Platinum Asset Management make up around 50% of all funds on offer.
  3. Some funds require investors to complete tax returns for overseas earnings.
  4. Certain funds not marked as “sustainable” may make investments in companies trading in weapons, tobacco, nuclear and other “unethical” business. The US 500 fund is an example of that.
  5. As is the case with any index fund or equities investment, markets go up and down. The Dotcom bubble in the early 2000s sank global indexes, as did the 2008 Global Financial Crisis. All indexes are now at record highs, but this is no guarantee of future earnings.

Want to compare InvestNow with Sharesies, Hatch and other platforms? Read our Comparing Sharesies vs Investnow vs Hatch and more guide. ​

Worried about what happens to your investments if InvestNow collapsed or shut down? Our easy to read custodian guide explains what you need to know. ​

Want to know how to trade or invest in the NZX? Our NZX in a Nutshell guide explains what you need to know. 

InvestNow - What You Need to Know

Claims made by InvestNow
​
“When selecting fund providers, we look for ones recognised in the industry as “award-winning” and with extensive global or NZ experience. This ensures you can invest online with confidence”.

Is it True?
  • It's a subjective claim, but overall, the funds available offer diversity to a new investor.
  • InvestNow offers SmartShares, Vanguard, Fisher Funds, Milford Asset Management - 25 other fund managers in total with the recent addition of Castle Point and Clarity Funds. This diversity is superior to platforms like Simplicity, Sharesies or Smartshares, which have a limited number of funds in comparison.
  • It’s also worthwhile noting that InvestNow’s fund managers pay InvestNow to be listed, and make money every time someone picks their fund to invest in. This is a form of commission which the individual investor pays for in one way or another.
 
“No Fees, No Middle Man. We firmly believe in removing all barriers to self-managing your investments, so InvestNow won’t be charging you any transaction or admin fees.”

Is it True?
  • It’s true when it comes to using the platform - a significant advantage over competing platforms such as Simplicity and Sharesies, both of which charge annual fees to use their platforms. However, whatever fund(s) you invest in will still charge you, but these will be charged by the fund manager and not InvestNow.
 
“We provide you ongoing market commentary and performance reports enabling you to manage your investments”.

Is it True?
  • Kind of. The platform does provide performance statistics (daily gain/loss etc.).
  • With regards to “ongoing market commentary”, we reviewed InvestNow’s blog, Facebook page and Twitter and didn’t find any market analytics.
  • With 149 funds investing globally, it’s a stretch for InvestNow to provide useful market commentary given the diversity of the underlying investments.

The Competition – InvestNow vs Smartshares and Simplicity

  • Hands down, InvestNow offers a lot more investment opportunities than Simplicity (3 funds) and Smartshares (40+ ETFs).
  • There is some crossover – all the major Smartshares ETFs are offered by InvestNow.
  • Minimum contributions: To start a portfolio with InvestNow you'll need $250 (or $50 if you make regular contributions, i.e. weekly, monthly or up to six-monthly) - Simplicity is $5,000 and Smartshares is $250.
  • Annual fees: Unlike the other platforms, there is no annual fee or per fund establishment fee. All the other platforms charge, making InvestNow the cheapest method of fund investing across all four platforms. 

What Others Are Saying

Susan Edmonds reported in 2017 in BusinessDay that investors using InvestNow “can start with a smaller deposit than is usually required, and no administration or transaction fees, with a number of fund managers on the platform, including AMP Capital, ANZ Investments, Harbour, Salt and Vanguard”. The article also states that “some of these fund managers would normally require minimum investments of $10,000. Via InvestNow, investors can start with $250”.

Tamsyn Parker, the Herald’s money editor, reported in 2017 that InvestNow “will offer mum and dad investors the chance to access a range of investment funds which normally require hundreds of thousands of dollars as a minimum direct entry”. The article then quotes InvestNow founder Anthony Edmonds (formerly the head of sales and marketing for AMP Capital) as saying that the platform “would allow small investors entry into funds normally reserved for wholesale investors with Harbour having a minimum of $250,000 and Vanguard $500,000 for direct investment”.
 
In 2017, Stuff.co.nz published an opinion piece around young people and money, claiming that “online platforms like InvestNow, RaboDirect, Smartshares, and Sharesies have greatly shrunk the role and cost of middlemen in the buying process for ETFs and are some of the lowest-fee options for investors” and that with InvestNow, the most popular funds tend to be "brand-driven" - SmartShares funds and the Vanguard fund being the most popular.
 
Finally, InvestNow published a press release in June 2017 claiming that in the 3 months since their public launch, “InvestNow (has) rocketed to having more than $50 million being directly managed by clients using the new online investment service”.

Want to compare InvestNow with Sharesies, Hatch and other platforms? Read our Comparing Sharesies vs Investnow vs Hatch and more guide. ​

Worried about what happens to your investments if InvestNow collapsed or shut down? Our easy to read custodian guide explains what you need to know. 

​Want to know how to trade or invest in the NZX? Our NZX in a Nutshell guide explains what you need to know.
The Bottom Line
  1. InvestNow is an excellent initiative for new and/or small investors looking for affordable exposure to local and global sharemarkets without paying platform fees. With 149 funds available, there is something for everyone’s risk profile.
  2. We like the Vanguard fund with its low 0.20% annual fee and exclusions of companies that are not socially beneficial (i.e. involved in tobacco, weapons and nuclear). 
  3. The underlying investment funds offer diversity in the sharemarket (both in New Zealand and overseas) without significant risk.
  4. ​With regards to user experience, InvestNow offers secure passcode protection to make log in secure. From there, it’s easy to navigate, invest, sell investments and read performance reports.
  5. InvestNow may not appeal to everyone - if you’re fresh into investing, the vast number of funds may be overwhelming. To remedy this, we’d like to see InvestNow classify its investments into risk categories (low, medium, high etc) to better explain them to inexperienced investors. If you are an active or aggressive saver/investor and want a fund manager to continuously pick shares or other securities for short/medium-term investment, there are plenty of funds offered that do this and you can access them from $50-$250, often a big discount from the minimum buy-in if you went to the fund manager directly. 
Limitations
InvestNow’s funds, like most managed funds, are not for the short term. While funds are free to buy and sell, to get the most out of index funds you’re realistically looking at a 5-10 year investment plan to maximize the return.
​
If you’re looking for funds investing in specific industries, such as oil and gas, agriculture or mining, the funds offered by InvestNow may not meet your needs. Most funds focus on diversified equity investments in Australasia, the USA and Europe. As such, you would need to find a specialist fund for such an investment.

10 Things to Know About InvestNow

InvestNow offers the InvestNow KiwiSaver Scheme

InvestNow offers the InvestNow KiwiSaver Scheme – A KiwiSaver Scheme that has 28 managed funds, 9 expert fund managers and no KiwiSaver administration fees. You can mix and match from 1 fund up to 28 funds. 

“Free Fees” does not extend to fund management and performance fees

Each fund manager will charge a management fee (the average across all InvestNow funds is 1.04%, however, this average is of the total fund charges by the fund managers, which includes management fees, admin costs and any performance fees) which is taken out of your investment. This means if the value of the shares your fund invests in go up 5% in one year, your return on investment would be 4% if the fund had a 1% management fee. The “Free Fees” marketing promoted by InvestNow refers to their own platform fees, as well as free buying and selling of funds. 

Some funds offered are managed by the owners of InvestNow

InvestNow is owned by Implemented Investment Solutions (IIS), a Wellington-based company which managers funds under the names “Russell Investments” and “Hunter Global”. These funds charge different fees, but InvestNow offers plenty of alternatives and doesn’t actively encourage in their related company funds. 
​

InvestNow offers a wide range of fund managers and investment diversification opportunities

There is a huge range of funds, all offering different levels of risk and fees. For index funds, any investment means you’re putting money into a number of companies, so if one doesn’t perform as expected the strength of other companies will balance out the bad eggs. For example, the NZ Top 50 fund invests in the 50 largest New Zealand listed companies, so you are well diversified. Other funds invest in 500 or more companies, meaning you are well diversified.
​

You can make regular investments or one-off investments from $50)

If you’d like to make regular contributions to savings outside of a KiwiSaver fund, InvestNow has relatively low entry points. Each fund needs to have a minimum of $250 to be established, or a commitment to invest $50 on a regular basis. With no per-fund establish fee or platform fee, we believe that InvestNow is very accessible and an affordable way to build up your chosen fund(s) at no marginal cost. 
​

The performance of an InvestNow portfolio is transparent

Logging in to InvestNow displays your portfolio value for every fund invested in, updated daily. You’ll be able to see details like increases or decreases in value from the previous day and monthly returns. It’s made very user-friendly for beginner investors.
​

Dividends your fund(s) receive can be reinvested, meaning more cash is invested on your behalf

Many of the shares your fund invests in will pay dividends. These cash payments represent the profits from companies returning it to the shareholders, i.e. you. When a company declares a dividend, your fund will receive money and buy more shares in the ETF with the dividend received. For example, if you receive a $100 dividend and the ETF is currently priced at $2.00, your ETF will buy 50 more fund units on your behalf. You’ll need to check with the specific fund to see their policy, as some also offer the alternative of dividends being paid out in cash. Reinvesting dividends is the best way to increase the value of your investment in the long term. 
​

Signing up isn't complicated, but you’ll need to wait a couple of days before making your first investment

Making your initial investment with InvestNow is very straightforward, even for the most inexperienced investor. You’ll need to set up login access first, using an email and creating a password. After this, you’ll need to complete your registration by entering in personal details (tax, bank account numbers, financial disclosures and dividend preferences). You can then fund your account and once the money has cleared (usually occurring every weekday morning), you’ll be able to start investing.
​

Children can join InvestNow too

If you want to start an investment for your children, InvestNow offers investments in any of their funds. You’ll only need a proof of ID – proof of address can be in the parent or guardian’s name. 
​

Funds that don’t mention "social responsibility" are unlikely to be socially responsible

InvestNow promotes a couple of funds that are socially responsible – the Vanguard International Shares Select Exclusions Index Fund (0.20% annual fee) and the Pathfinder Global Water Fund (1.30% annual fee). Beyond these, it’s uncertain which funds are “socially responsible” and therefore their status cannot be implied or assumed. 

Responsible Investments, according to InvestNow, are defined by the investor and what the investor considers to be ‘responsible’, for example, an investor may consider a fund that simply excludes investing in tobacco, responsible. But another investor might hold a higher view of Responsible Investing, for example, a fund that only includes investments that have a positive impact, such as renewable energy.

All funds in the range of Managed Funds on InvestNow, to some degree (via exclusions or inclusions), follow a Responsible Investment strategy. For more information on Socially Responsible Investment, see Mindful Money’s website or our Responsible Investing: Explained article.

Our Conclusion

  • InvestNow is the first investment platform to smash administration fees to $0 while breaking down the barriers to investing with affordable $50-$250 thresholds. Funds previously unobtainable to most individuals are now able to be invested in. 
  • The 149 funds offer diversity and are backed by an online platform that delivers up to date portfolio data at no cost to the investor. There are a number of index funds offered, so the risk of picking the wrong companies is reduced as each fund invests in a number of shares. 
  • InvestNow perhaps offers too many funds, which may confuse or intimidate newbie investors. However, for most people looking to make one-off or ongoing investments, the platform is a perfect choice to launch from. 

Want to compare InvestNow with Sharesies, Hatch and other platforms? Read our Comparing Sharesies vs Investnow vs Hatch and more guide. ​

Worried about what happens to your investments if InvestNow collapsed or shut down? Our easy to read custodian guide explains what you need to know. ​

​Want to know how to trade or invest in the NZX? Our NZX in a Nutshell guide explains what you need to know.

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