Sharesies Review
Updated 21 June 2019
Summary of Sharesies
Upcoming enhancements: From mid-July, Sharesies investors will have access to all companies listed on the NZX main board alongside its current share offerings in exchange-traded funds (ETFs) and managed funds.
- The Wellington-based platform offers investment into 26 funds, charging fees starting at $1.50 per month to use its platform for balances over $50.
- In addition to the Sharesies platform fees, there are annual fund fees which range from 0.34% to 1.3%, with 20 of the 26 funds operated by SmartShares (index funds), 3 by New Zealand fund manager Pathfinder (socially responsible funds) and 2 by AMP Capital.
- Investments from $5 can be made into any fund, payable by bank transfer. Investors manage their portfolio via the Sharesies website and/or the app.
- Compared to InvestNow, SmartShares and Simplicity, Sharesies' platform fees are the highest for investors, with InvestNow offering similar funds with no annual fee.
- The platform also offers the second smallest amount of funds available, but for new investors, the choice offered should suffice as it covers the major local and global sharemarket indexes.
- From the perspective of user experience, Sharesies goes beyond all expectations and delivers a friendly platform that is rich on design while making investments easy. Ultimately the monthly/annual fees make it less competitive than other platforms, meaning $18 per year on a $500 balance is a high price to pay. Understandably, as balances increase, the annual fee as a percentage of investment balance falls.
Upcoming enhancements: From mid-July, Sharesies investors will have access to all companies listed on the NZX main board alongside its current share offerings in exchange-traded funds (ETFs) and managed funds.
Sharesies' Background
Investment options specific for young people and outside of the housing market have been few and far between for young people in New Zealand. The Sharesies platform is a product of a startup incubator. Its purpose has been to make investing obtainable for young people. To achieve this, it now offers anybody the opportunity to invest in the sharemarket for as little as $5. Sharesies has grown to over 40,000 members, with nearly NZ$60m invested.
Our Review
In this guide, we outline what Sharesies is, what funds and shares they offer to the Kiwi investor, what index funds are and how they're different from other funds. We also look at the fees involved in investing via Sharesies.
Disclaimer: MoneyHub is not a Financial Adviser, and this guide has been published to explain the investment fundamentals and outline the pros and cons of Sharesies as an investment platform.
Investment options specific for young people and outside of the housing market have been few and far between for young people in New Zealand. The Sharesies platform is a product of a startup incubator. Its purpose has been to make investing obtainable for young people. To achieve this, it now offers anybody the opportunity to invest in the sharemarket for as little as $5. Sharesies has grown to over 40,000 members, with nearly NZ$60m invested.
Our Review
In this guide, we outline what Sharesies is, what funds and shares they offer to the Kiwi investor, what index funds are and how they're different from other funds. We also look at the fees involved in investing via Sharesies.
Disclaimer: MoneyHub is not a Financial Adviser, and this guide has been published to explain the investment fundamentals and outline the pros and cons of Sharesies as an investment platform.
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 provide 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 due to the fact that 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 to 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 Sharesies
The fees are as followed:
Investment Products include:
If I buy into Sharesies, am I buying a share on the sharemarket?
The answer to this is yes. Sharesies offers funds which invest in shares. Your investment in Sharesies is as diversified as the number of companies included in the ETFs.
Risk
- Funds on Offer: Currently, Sharesies offers 26 funds, 20 of which are indexed (ETF) based.
- Examples of Funds: The “NZ Top 50” fund invests in the 50 largest companies listed on the New Zealand Stock Exchange, including Spark, Fisher & Paykel Healthcare and Auckland Airport Ltd. Sharesies also offers investments in overseas shares and specialised sectors such as property and resources (mining, energy and metals etc). Sharesies also offers the most popular index fund in the world, the US 500, which invests in the top 500 American companies listed, such as Facebook, Coca Cola and Apple.
- Socially Responsible funds: There are three. The first fund, “Pathfinder Global Responsibility Fund” excludes any investments in companies that operate in gambling, tobacco, controversial weapons and thermal coal. The second fund, “Pathfinder Global Water Fund”, invests in companies involved in the water industry – specifically water treatment, pipe and pump manufacturing and specialist engineering. The Pathfinder Global Property Fund invests in global property companies including traditional office, retail, industrial and residential properties, as well as other property investments like data centres, cell towers and healthcare facilities.
- Diversity: The 26 funds on offer give a new-to-investing individual a reasonable choice and in our view don't overwhelm with too many funds.
- Portfolio management: Sharesies offers a member-login and app for day to day investing and portfolio management which allows continuous tracking of investments. This is different to the SmartShares platform, which gives daily summaries both nothing personalised or graph/chart based.
The fees are as followed:
- Monthly - free for a portfolio < $50, $1.50 per month for a portfolio of $50 to $3000, $3.00 per month for a $3,000+ portfolio
- Alternatively, there is an Annual fee - $30, no matter the size of your portfolio, and charged once a year.
- To encourage new investment, Sharesies routinely offers $15 free “credit” to members to put towards their first investment.
Investment Products include:
- Cash (i.e. bank deposits in New Zealand banks)
- New Zealand Fixed Income (i.e. investments in government bonds or company debt)
- New Zealand Shares (i.e. shares in Spark, Fletcher Building and Air New Zealand)
- Australian Shares
- International Fixed Income bonds and deposits
- International Shares
If I buy into Sharesies, am I buying a share on the sharemarket?
The answer to this is yes. Sharesies offers funds which invest in shares. Your investment in Sharesies is as diversified as the number of companies included in the ETFs.
Risk
- The 26 funds each offer a unique investment strategy. Some are low risk, some a medium risk and some are high risk. The returns/profit you make don’t necessarily depend on the risk you take.
- All international Sharesies funds are 100% hedged to the New Zealand dollar. This means that if our dollar rises against any overseas currency your Sharesies has investments in, the value of the overseas investment does not reduce due to the hedging in place. This eliminates exchange rate movement as an investment risk, so your overseas portfolio won’t be affected by the day-to-day movements of the Kiwi dollar.
Need to Knows: Requirements to open up a Sharesies account:
- Anyone can open a Sharesies account, including children. You must however have a New Zealand bank account and are living in New Zealand.
- You’ll also need proof of address and a form of ID
- To keep your Sharesies active, you must pay the monthly or annual subscription fee
- You’ll need to pick which fund(s) you want to invest in based on your sensitivity to risk
What do the different Sharesies funds invest in?
There are 26 funds in total, outlined below in the categories of:
Some offer 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.
AMP Capital Funds
1. AMP Capital Global Shares (Higher Risk)
Fees: 0.38% per year, and 0.15% when buying or selling
Investment profile: This fund invests in over 2000 companies around the world , including developing and emerging markets. Investments include well-known companies like Facebook, Johnson & Johnson, Samsung, Coca-Cola, Visa and Apple, and excludes Tobacco companies and controversial weapons such as nuclear weapons, cluster bombs and landmines.
2. AMP Capital Responsible NZ Fund (Medium Risk)
Fees: 1% per year, and 0.30% when buying or selling
Investment profile: This fund invests in mostly New Zealand shares, with the aim to outperform the S&P/NZX 50 Index. The fund is managed by Harbour Asset Management Ltd.
Socially responsible investments (Pathfinder)
1. Pathfinder Global Responsibility Fund (Higher risk)
Fees: 0.93% per year of your investment, and 0.05% when buying or selling
Investment profile: This fund invests in “socially responsible companies around the world”, so excludes companies involved in restricted industries such as gambling, tobacco, controversial weapons and thermal coal. Companies in this index have the highest Environmental, Social and Governance (ESG) score.
2. Pathfinder Global Water Fund (Higher risk)
Fees: 1.30% per year of your investment, and 0.05% when buying or selling
Investment profile: This fund Invests in “socially responsible companies around the world” specifically involved in the water industry; water treatment, pipe and pump manufacturing and specialist engineering, but excludes bottled water companies in the water fund.
3. Pathfinder Global Property Fund (Medium Risk)
Fees: 1.00% per year of your investment, and 0.05% when buying or selling
Investment profile: This fund invests in global property companies including traditional office, retail, industrial and residential properties, as well as other property investments like data centres, cell towers and healthcare facilities.
The NZ Core Fund
Fees: 0.50% per year of your investment, and 0.10% when buying or selling
Investment profile: This fund invests in shares like Spark, as well as smaller companies. The NZ Core Fund is a Smartshares managed fund.
Exchange-traded funds (Smartshares ETFs)
Most of these are Index Funds (excluding the NZ Bond Fund) which invest in SmartShares. This means that your money is spread out over a number of companies within the fund.
1. NZ Top 50 Fund (Higher risk)
Fees: 0.50% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in the 50 largest companies listed on the New Zealand Stock Exchange (NZX), including companies like, Spark, Fisher & Paykel Healthcare and Auckland Airport. The investments are not made equally – the biggest companies in market value get more of your money (i.e. Spark (large) vs Trademe (smaller).
2. Australian Top 20 Fund (Higher risk)
Fees: 0.60% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in the top 20 companies listed on the Australian Stock Exchange (ASX), including shares like ANZ Bank, Qantas, Woolworths, and the Commonwealth Bank of Australia.
3. US 500 Fund (Higher risk)
Fees: 0.34% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in the top 500 companies in the United States, including shares like Apple, Alphabet, amazon.com, and Facebook.
4. NZ Bond Fund (Lower risk)
Fees: 0.54% per year of your investment, and 0% when buying or selling
Investment profile: This fund does not invest in shares, but instead a number of term cash deposits and bonds, including some which are issued or guaranteed by the New Zealand Government. A bond is different to a share - a bond is a loan typically made to corporations or governments and has a fixed repayment date and interest charge.
5. NZ Property Fund (Medium risk)
Fees: 0.54% per year of your investment, and 0% when buying or selling
Investment profile: The NZ Property Fund invests in property companies listed on NZX. These are companies which own a lot of commercial, industrial and/or residential property. Examples include Kiwi Properties Group Limited and Argosy Property.
6. Australian Resources Fund (Higher risk)
Fees: 0.54% per year of your investment, and 0% when buying or selling
Investment profile: Your investment will be spread across the top 200 companies in the resources sector that are listed on the Australian Stock Exchange (ASX). This includes companies in Energy, Metals and Mining sectors.
7. Europe Fund (Higher risk)
Fees: 0.50% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in top sized companies based in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the UK, with more than 1,200 shares held by the fund.
8. Global Bond Fund (Lower Risk)
Fees: 0.54% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in global fixed-interest assets, such as bonds issued by the governments of USA, United Kingdom, Japan, France and other countries, as well as bonds issued by other governments, companies and non-government entities.
9. NZ Cash Fund (Lower risk)
Fees: 0.33% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in short-term savings, such as deposits and short-term debt securities issued by NZ banks and large corporations.
10. NZ Mid Cap (Medium risk)
Fees: 0.60% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in some of New Zealand's top growth companies like Chorus, Air New Zealand, and Comvita. It includes companies in the NZ Top 50 but with the top 10 and dual-listed Australian banks removed.
11. Emerging Markets Fund (Higher risk)
Fees: 0.50% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in companies based in “emerging” markets around the world this includes China, Mexico, Brazil, Taiwan, and South Africa. This fund has high potential for growth, but also high risk - share prices may swing up and down more than that of share prices of companies in developed countries. This fund is really only appropriate for long-term investing goals.
12. Asia Pacific Fund (Higher risk)
Fees: 0.55% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in companies based across Japan, Australia, Korea, Hong Kong, Singapore and New Zealand. This index is managed by Vanguard (one of the world’s largest investment firms).
13. Global Automation & Robotics Fund (Higher Risk)
Fees: 0.75% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 100 companies worldwide working in the area of automation and robotics, operating in the USA, Japan, Taiwan, Germany, United Kingdom and more. It is managed by BlackRock, the world’s largest asset manager.
14. Global Healthcare Innovation Fund (Higher Risk)
Fees: 0.75% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 70 companies around the world that focus on innovating in healthcare services, operating in the USA, South Korea, Japan, Germany, India and more.
15. Global Responsible Fund (Higher Risk
Fees: 0.54% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 1,500 companies, from over 20 developed countries across the world. Over 50% of this fund is invested in the USA; it also invests in Japan, U.K, France, Canada and more. The fund covers a large range of sectors including IT, finance, communications and healthcare. It excludes thermal coal, oil sands, controversial and nuclear weapons, civilian firearms, tobacco and other investments. This fund is managed by BlackRock, the world’s largest asset manager.
16. Emerging Markets Responsible Fund (Higher Risk)
Fees: 0.59% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in 2,500 +small, mid, and large-cap companies from emerging markets with an ESG strategy (Environmental, Social & Governance). This fund invests in companies in China, South Korea, Taiwan, India, Brazil, South Africa and more. It covers a range of different sectors including finance, IT, communications, materials and energy. All thermal coal, oil sands, controversial and nuclear weapons, civilian firearms, tobacco and related investments are excluded. It also excludes companies that violate the principles of the UN Global Compact. This fund is managed by BlackRock, the world’s largest asset manager.
17. Japan Responsible Fund (Higher Risk)
Fees: 0.55% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 300 companies with an ESG (Environmental, Social & Governance) investment strategy, covering a range of sectors including industrial, finance, IT, healthcare and more. Companies include Toyota, Sony and Softbank. It excludes any negative industries, such as fossil fuels and weapons.
18. Europe Responsible Fund (Higher Risk)
Fees: 0.55% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in 400 companies across Europe with an ESG investment strategy, located in the U.K, France, Germany, Switzerland, Netherlands, and more. It covers a broad range of sectors including finance, industrial, healthcare, IT, energy and more. It excludes any negative industries, such as fossil fuels and weapons.
19. US Responsible Fund (Higher Risk)
Fees: 0.34% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 550 US companies with an ESG (Environmental, Social & Governance) investment strategy. This fund invests across IT, healthcare, finance, communication, energy and more. It excludes any negative industries, such as fossil fuels and weapons.
20. Global Aggregate Bond Fund (Lower Risk)
Fees: 0.55% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 3,400 bonds from around the world. This is a very diversified and low-risk fund that invests in government and corporate bonds across the US, Japan, France, U.K, Germany and more.
There are 26 funds in total, outlined below in the categories of:
- AMP Capital Funds
- Socially responsible investments (Pathfinder)
- The NZ Core Fund
- Exchange-traded funds (Smartshares ETFs)
Some offer 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.
AMP Capital Funds
1. AMP Capital Global Shares (Higher Risk)
Fees: 0.38% per year, and 0.15% when buying or selling
Investment profile: This fund invests in over 2000 companies around the world , including developing and emerging markets. Investments include well-known companies like Facebook, Johnson & Johnson, Samsung, Coca-Cola, Visa and Apple, and excludes Tobacco companies and controversial weapons such as nuclear weapons, cluster bombs and landmines.
2. AMP Capital Responsible NZ Fund (Medium Risk)
Fees: 1% per year, and 0.30% when buying or selling
Investment profile: This fund invests in mostly New Zealand shares, with the aim to outperform the S&P/NZX 50 Index. The fund is managed by Harbour Asset Management Ltd.
Socially responsible investments (Pathfinder)
1. Pathfinder Global Responsibility Fund (Higher risk)
Fees: 0.93% per year of your investment, and 0.05% when buying or selling
Investment profile: This fund invests in “socially responsible companies around the world”, so excludes companies involved in restricted industries such as gambling, tobacco, controversial weapons and thermal coal. Companies in this index have the highest Environmental, Social and Governance (ESG) score.
2. Pathfinder Global Water Fund (Higher risk)
Fees: 1.30% per year of your investment, and 0.05% when buying or selling
Investment profile: This fund Invests in “socially responsible companies around the world” specifically involved in the water industry; water treatment, pipe and pump manufacturing and specialist engineering, but excludes bottled water companies in the water fund.
3. Pathfinder Global Property Fund (Medium Risk)
Fees: 1.00% per year of your investment, and 0.05% when buying or selling
Investment profile: This fund invests in global property companies including traditional office, retail, industrial and residential properties, as well as other property investments like data centres, cell towers and healthcare facilities.
The NZ Core Fund
Fees: 0.50% per year of your investment, and 0.10% when buying or selling
Investment profile: This fund invests in shares like Spark, as well as smaller companies. The NZ Core Fund is a Smartshares managed fund.
Exchange-traded funds (Smartshares ETFs)
Most of these are Index Funds (excluding the NZ Bond Fund) which invest in SmartShares. This means that your money is spread out over a number of companies within the fund.
1. NZ Top 50 Fund (Higher risk)
Fees: 0.50% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in the 50 largest companies listed on the New Zealand Stock Exchange (NZX), including companies like, Spark, Fisher & Paykel Healthcare and Auckland Airport. The investments are not made equally – the biggest companies in market value get more of your money (i.e. Spark (large) vs Trademe (smaller).
2. Australian Top 20 Fund (Higher risk)
Fees: 0.60% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in the top 20 companies listed on the Australian Stock Exchange (ASX), including shares like ANZ Bank, Qantas, Woolworths, and the Commonwealth Bank of Australia.
3. US 500 Fund (Higher risk)
Fees: 0.34% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in the top 500 companies in the United States, including shares like Apple, Alphabet, amazon.com, and Facebook.
4. NZ Bond Fund (Lower risk)
Fees: 0.54% per year of your investment, and 0% when buying or selling
Investment profile: This fund does not invest in shares, but instead a number of term cash deposits and bonds, including some which are issued or guaranteed by the New Zealand Government. A bond is different to a share - a bond is a loan typically made to corporations or governments and has a fixed repayment date and interest charge.
5. NZ Property Fund (Medium risk)
Fees: 0.54% per year of your investment, and 0% when buying or selling
Investment profile: The NZ Property Fund invests in property companies listed on NZX. These are companies which own a lot of commercial, industrial and/or residential property. Examples include Kiwi Properties Group Limited and Argosy Property.
6. Australian Resources Fund (Higher risk)
Fees: 0.54% per year of your investment, and 0% when buying or selling
Investment profile: Your investment will be spread across the top 200 companies in the resources sector that are listed on the Australian Stock Exchange (ASX). This includes companies in Energy, Metals and Mining sectors.
7. Europe Fund (Higher risk)
Fees: 0.50% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in top sized companies based in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the UK, with more than 1,200 shares held by the fund.
8. Global Bond Fund (Lower Risk)
Fees: 0.54% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in global fixed-interest assets, such as bonds issued by the governments of USA, United Kingdom, Japan, France and other countries, as well as bonds issued by other governments, companies and non-government entities.
9. NZ Cash Fund (Lower risk)
Fees: 0.33% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in short-term savings, such as deposits and short-term debt securities issued by NZ banks and large corporations.
10. NZ Mid Cap (Medium risk)
Fees: 0.60% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in some of New Zealand's top growth companies like Chorus, Air New Zealand, and Comvita. It includes companies in the NZ Top 50 but with the top 10 and dual-listed Australian banks removed.
11. Emerging Markets Fund (Higher risk)
Fees: 0.50% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in companies based in “emerging” markets around the world this includes China, Mexico, Brazil, Taiwan, and South Africa. This fund has high potential for growth, but also high risk - share prices may swing up and down more than that of share prices of companies in developed countries. This fund is really only appropriate for long-term investing goals.
12. Asia Pacific Fund (Higher risk)
Fees: 0.55% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in companies based across Japan, Australia, Korea, Hong Kong, Singapore and New Zealand. This index is managed by Vanguard (one of the world’s largest investment firms).
13. Global Automation & Robotics Fund (Higher Risk)
Fees: 0.75% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 100 companies worldwide working in the area of automation and robotics, operating in the USA, Japan, Taiwan, Germany, United Kingdom and more. It is managed by BlackRock, the world’s largest asset manager.
14. Global Healthcare Innovation Fund (Higher Risk)
Fees: 0.75% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 70 companies around the world that focus on innovating in healthcare services, operating in the USA, South Korea, Japan, Germany, India and more.
15. Global Responsible Fund (Higher Risk
Fees: 0.54% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 1,500 companies, from over 20 developed countries across the world. Over 50% of this fund is invested in the USA; it also invests in Japan, U.K, France, Canada and more. The fund covers a large range of sectors including IT, finance, communications and healthcare. It excludes thermal coal, oil sands, controversial and nuclear weapons, civilian firearms, tobacco and other investments. This fund is managed by BlackRock, the world’s largest asset manager.
16. Emerging Markets Responsible Fund (Higher Risk)
Fees: 0.59% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in 2,500 +small, mid, and large-cap companies from emerging markets with an ESG strategy (Environmental, Social & Governance). This fund invests in companies in China, South Korea, Taiwan, India, Brazil, South Africa and more. It covers a range of different sectors including finance, IT, communications, materials and energy. All thermal coal, oil sands, controversial and nuclear weapons, civilian firearms, tobacco and related investments are excluded. It also excludes companies that violate the principles of the UN Global Compact. This fund is managed by BlackRock, the world’s largest asset manager.
17. Japan Responsible Fund (Higher Risk)
Fees: 0.55% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 300 companies with an ESG (Environmental, Social & Governance) investment strategy, covering a range of sectors including industrial, finance, IT, healthcare and more. Companies include Toyota, Sony and Softbank. It excludes any negative industries, such as fossil fuels and weapons.
18. Europe Responsible Fund (Higher Risk)
Fees: 0.55% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in 400 companies across Europe with an ESG investment strategy, located in the U.K, France, Germany, Switzerland, Netherlands, and more. It covers a broad range of sectors including finance, industrial, healthcare, IT, energy and more. It excludes any negative industries, such as fossil fuels and weapons.
19. US Responsible Fund (Higher Risk)
Fees: 0.34% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 550 US companies with an ESG (Environmental, Social & Governance) investment strategy. This fund invests across IT, healthcare, finance, communication, energy and more. It excludes any negative industries, such as fossil fuels and weapons.
20. Global Aggregate Bond Fund (Lower Risk)
Fees: 0.55% per year of your investment, and 0% when buying or selling
Investment profile: This fund invests in over 3,400 bonds from around the world. This is a very diversified and low-risk fund that invests in government and corporate bonds across the US, Japan, France, U.K, Germany and more.
Who is Sharesies Suited to?
Standout Features:
But be aware:
- Best For: Very small time investors looking to get exposure in the share market without making a large dollar commitment. Sharesies invests in the same funds as Smartshares, the difference being in Sharesies you can contribute a lot less ($5 vs $500) but there is a monthly or annual fee, whereas Smartshares is free. With most funds offered, 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.
- Not suitable for: Medium to large investors looking to make individual investments in specific companies, or investors looking for short-term buying and selling. Index funds don’t move that much in the short term.
- Most suitable investor: Young, under 40 and wishing to commit under $5,000 to learn about the sharemarket as well as put money into a relatively low-risk investment. The app and website is a step above other platforms like InvestNow and SmartShares and gives some benefit to the monthly or annual fee charged.
Standout Features:
- Flexible investing from $5, perfect for newbie investors looking to get into sharemarket while avoiding brokerage fees on individual trades.
- User-friendly website and app for monitoring investment performance
- 26 funds with a lot of diversity, with management fees between 0.30-1.30%
- 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.
- The numerous socially responsible funds will likely appeal to investors looking for ethical investments
But be aware:
- 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.
- The $1.50 - $3.00 per month fee is poor value for money if you only have a small investment - for example $18 on a $500 investment is a 3.60% management fee (the range is usually 1-3% among New Zealand fund managers). The more you can invest, the cheaper the overall costs per dollar invested.
- As is the case with any index fund or equities investments, 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.
Sharesies - What You Need to Know
Claims made by Sharesies
“For a monthly fee from $1.50 - $3.00, you and buy and sell as many Sharesies as you like with no additional fee”.
Is it True?
For most funds, yes. The Pathfinder Global Responsibility fund and the Pathfinder Global Water fund charge 0.05% of the investment value when buying and selling. All other funds are free to buy and sell. There are management charges but these are deducted from each Sharesies investment, so you’ll never pay more than the Sharesies fee per year in cash.
“Grow your portfolio, one payday at a time”
Is it True?
Yes, the nature of Sharesies makes it easy to make small, manageable contributions and buy a low number of index funds without paying fees to a broker or investment manager.
“For a monthly fee from $1.50 - $3.00, you and buy and sell as many Sharesies as you like with no additional fee”.
Is it True?
For most funds, yes. The Pathfinder Global Responsibility fund and the Pathfinder Global Water fund charge 0.05% of the investment value when buying and selling. All other funds are free to buy and sell. There are management charges but these are deducted from each Sharesies investment, so you’ll never pay more than the Sharesies fee per year in cash.
“Grow your portfolio, one payday at a time”
Is it True?
Yes, the nature of Sharesies makes it easy to make small, manageable contributions and buy a low number of index funds without paying fees to a broker or investment manager.
The Competition – Sharesies vs InvestNow, SmartShares, Simplicity and Superlife
- In a nutshell, Sharesies is the most expensive platform in its class for small investors.
- Sharesies offers many funds which are also offered by SmartShares. The other funds are managed by AMP Capital and Pathfinder.
- Everything else is the same as Smartshares when it comes to the underlying investments, but the difference is the monthly or $30 annual fee for Sharesies ($0 for Smartshares) and the minimum contribution is $5 ($500 for Smartshares).
- InvestNow offers a wider range of fees with $0 annual platform fees, saving an investor $18-36 per year compared to Sharesies.
- The benefits of Sharesies is that investments can be as little as $5, but for a serious investor willing to contribute at least $1,000 a year to their fund, the free fee offering from InvestNow is far more competitive.
- Simplicity offers index-based funds, with all funds charging a fixed at a $30 membership fee/year. When it comes to management fees, the Growth fund is 0.31% per year, whereas the NZ Share and Bond funds have a low 0.10% fund management fee. For children under 18, there is no annual $30 membership fee. However, the platform is for investors with deep pockets - Simplicity funds have a minimum investment of $5,000 (Sharesies starts at $5).
What Others Are Saying
Spinoff.co.nz reported in 2017 that Sharesies is “an online investment tool that lets Kiwis take a slice of diversified funds without the need to make a big investment. For a set cost of $30 per year, minus the investments, you can get a spread of shares without stock picking and reading the tea leaves”.
Stuff.co.nz reported in 2017, just after Sharesies had launched published an article stating that in 8 weeks, Sharesies had more than $1 million in assets under management…with one investor having deposited $49,000, others depositing as little as $2, with the average amount of $285 for each customer. The article also stated that customers are equally split along gender lines with 80 per cent of the investors under 40.
Spinoff.co.nz reported in 2017 that Sharesies is “an online investment tool that lets Kiwis take a slice of diversified funds without the need to make a big investment. For a set cost of $30 per year, minus the investments, you can get a spread of shares without stock picking and reading the tea leaves”.
Stuff.co.nz reported in 2017, just after Sharesies had launched published an article stating that in 8 weeks, Sharesies had more than $1 million in assets under management…with one investor having deposited $49,000, others depositing as little as $2, with the average amount of $285 for each customer. The article also stated that customers are equally split along gender lines with 80 per cent of the investors under 40.
The Bottom Line
- Sharesies is a good initiative for new and/or small investors looking for affordable exposure to local and global sharemarkets without the need to dig deep. We like the Pathfinder funds as alternatives for socially-minded savers, but the SmartShares offering now includes a number of sustainable funds.
- Sharesies does charge an annual fee of $30 (or $18-$36 per month, depending on portfolio size), so it’s better if you can invest at least $1,000 to spread the fee further.
- The underlying investment funds offer diversity in the sharemarket (both in New Zealand and overseas) without significant risk. In short, it’s a “set and forget” offering based on the rationale being that market investment always beats a fund manager in the long term with the risks being relatively low and the returns seen to be reliable.
- With regards to user experience, Sharesies has a beta version that makes logging in seamless.
- The platform isn't suitable for larger investors - anyone looking to invest over $250 is comparatively better off looking at InvestNow, but if you want a better user experience and are fine to pay the monthly or $30 annual fee, Sharesies may be for you.
- Sharesies may not be for everyone. 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, Sharesies is not for you.
Limitations
- Sharesies doesn’t offer a huge range of funds, but what they do offer would meet the needs and risk profile of an average new investor.
- Customer support is limited to email and social media, and the team won’t offer any form of financial advice as to what fund(s) to invest in.
- Sharesies isn’t for the short term. While most funds are free to buy and sell, to get the most out of index funds you’re looking at a 5-10 year investment plan.
- If you’re looking for funds investing in specific industries, such as oil and gas, agriculture or mining, Sharesies it not for you. Its offering is focused on diversified equity investments in the biggest companies in New Zealand and around the world. As such, you would need to find a specialist fund for such an investment.
10 Things to Know About Sharesies
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Sharesies isn’t a KiwiSaver scheme, but you can invest in the same funds via SuperLife20 out of 26 funds are NZX-listed Smartshares – SuperLife is a KiwiSaver provider investing in the same funds providing an opportunity for KiwiSaver investment if you feel index funds are most suited to your needs.
For our outline of KiwiSaver, click here. |
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You must buy Sharesies directlyNo other institution offers Sharesies, so once you’ve committed to paying the $1.50 - $3.00 monthly or annual $30 membership fee, it’s cheaper to stick with Sharesies for small investments, especially as you can invest as little as $5.
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Sharesies offer excellent investment diversificationAn investment in one Sharesies fund 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 Sharesies 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.
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You can make regular investments or one-off investments from $5If you’d like to make regular contributions to savings outside of a KiwiSaver fund, Sharesies offers the ability to make an investment from $5. It also offers auto-invest, with more details here.
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The performance of Sharesies investments are transparentWith the Sharesies app in beta mode, you can get a lot of data about your investment every time you log in. You get up to date data that tells you details like increases or decreases in value from the previous day and monthly returns. It’s made very user-friendly for beginner investors.
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Dividends your fund(s) receive are reinvested, meaning more cash is invested on your behalfMany 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 Sharesies on your behalf. This is the best way to increase the value of your investment. You do however get the option of being paid out in cash when a dividend is declared, and the value will be sent to your bank account.
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Sharesies offers a proven investment model by investing in index fundsIndex funds historically outperform managed funds. According to Fortune Magazine, the S&P 500 (the major American sharemarket index) outperformed more than 82% of all active funds over a 15-year period. Given the low fees an index fund charges and the reliability in outperforming active funds, it's a relatively conservative approach to investment for your retirement.
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Sharesies isn't the only index fund on the marketSimplicity and Smartshares both offer ETF-based investments. The fees vary, as does the minimum investment, and as more entrants come to the market, we expect the fees charged to fall as competition heats up.
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Signing up isn't complicated, but you’ll need to decide what fund(s) to invest in firstMaking your initial investment in Sharesies is very straight forward for even the most inexperienced investor. After providing proof of ID and address, you’ll need to decide your initial investment and what fund to pick. The process is fairly quick; you'll need a form of ID (New Zealand driver licence or New Zealand passport) and your IRD number. It takes about ten minutes via their online form and payment options are made clear during the process.
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Funds that don’t mention "socially responsibility" are unlikely to be socially responsibleSharesies promotes two funds which are socially responsible – the Global Responsibility Fund and the Global Water Fund. The other funds contain New Zealand and overseas heavyweights, including defence/arms manufacturers and oil drillers. For this reason, only specified socially responsible funds are indeed suited to certain socially-minded investors.
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Our Conclusion
- Sharesies is a great advancement for young Kiwis looking at an affordable way to enter the sharemarket locally (and overseas) without their investment being eaten up in brokerage fees. With the index funds offered, the risk of picking the wrong companies is reduced as each fund invests in a number of shares.
- The annual platform fees are the highest for small investors which may discourage take up in the scheme, especially when InvestNow and SmartShares offer the same funds without a platform fee.
- The funds offered tick the box for diversity while staying committed to market heavyweights in New Zealand, Australia, the USA and Europe.
- Participants looking to invest in a low risk, index fund with low fees can find a lot of choice from the Sharesies funds. The three Pathfinder funds offer socially responsible investment for as little as $5, unobtainable for less than $5,000 before Sharesies.
- Sharesies offers the right number of funds for a new investor - the 26 currently available offer diversity and won't overwhelm the investor looking for the most suitable fund.
