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Smart (Smartshares) Review - Understanding the 40+ ETFs Listed on the NZX

We review Smart (previously known as Smartshares), the NZX ETF platform offering 40+ index-focused investment options
Updated 24 December 2024

Summary of Smart
  • Smart was previously known as Smartshares, before undergoing a brand refresh in October 2024. 
  • Smart offers 45+ exchange traded funds (ETFs) which trade on the NZX or can be purchased directly with Smart, an investment company owned by the NZX.
  • For anyone buying Smart ETFs directly with Smart, the set-up fee for new investors is $30, with no fees charged for subsequent contributions. This can result in potential savings compared to purchasing units in Smart ETFs through an investment platform such as Sharesies, where additional brokerage fees apply.
  • The minimum investment is $500 if you invest directly with Smart. Once registered, you have the option to make additional contributions with a minimum lump-sum investment of $250. The alternative is to use Sharesies which offers Smart with a 1 cent minimum investment. 
  • The fees for Smart ETFs vary depending on the specific ETF(s) you choose to invest in. Each ETF has its own fee structure, typically expressed as an annual management fee, which is calculated as a percentage of your investment. These fees cover the costs associated with managing the fund, such as administration, compliance, and operational expenses.
  • Smart provides clear and transparent information about their ETF fees, making it easier to make informed decisions - each ETF has a dedicated webpage, linked below, which explains the fees, risk, 1-year return and other important information.
Our Review 
In this guide, we outline what Smart is, what ETfs they offer to New Zealand investors, what index funds are and how they're different to other funds, as well as looking at alternatives and the level of fees involved.
 
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 Smart as an investment option. We do not focus on ETF performance but rather fund options, fees and alternatives.

This Guide covers:
Know This: We are not a fan of high-fee managed funds – some institutions charge as much as 3% on your investment funds every year, while you take all the risk on what they invest in. Since around 2016 with the launch of Simplicity and Kernel (in 2019), index funds have become available to the average New Zealand investor. Smart offers 40+ exchange traded funds (ETFs), investing locally, in Australia and around the world in shares.

Important information:
  • Are you considering investing in ETFs or index funds? Our comprehensive Kernel vs Smart comparison breaks down the key differences between these two leading players in the index and ETF investment market, helping you make an informed decision.
  • Are you looking for an investing platform that offers a wide selection of funds? Our reviews of InvestNow and Kernel Wealth have you covered. Other investing options (with a US focus, suitable for ETFs): Tiger Brokers offers low FX fees; and Hatch, Sharesies and Stake are widely popular.
  • Are you new to the NZX? Our NZX in a Nutshell guide explains what you need to know about investing and trading.
Your consumer guide to Smart is sponsored by our friends at Kernel, a leading New Zealand-based index fund manager and investing platform.
  • If you're looking to invest in Smart, this guide helpfully takes you through the entire process of what you need to know.
  • Kernel is a passive alternative to ETFs, offering 20+ index funds that aim to offer value and diversification. Our Kernel review explains more.
  • Kernel is 100% Kiwi owned and are committed to no-nonsense index funds with low, transparent fees.
  • Trusted by tens of thousands of Kiwis, Kernel offers easily accessible index fund investing.
  • Kernel's innovative index fund range includes ESG, thematic, commercial property, dividend and infrastructure funds as well as broadly diversified equity funds.

First Steps - What is an "index fund"?

An index fund is a type of investment designed to mirror the performance of a specific market index, such as the NZX50 (New Zealand's 50 largest companies) or the S&P 500 (the 500 largest publicly traded companies in the US). These funds offer a simple way to gain exposure to a wide range of companies in one investment.

Key Benefits of Index Funds:
  • Diversification: Your investment is spread across many companies within the index, reducing the risk tied to the performance of any single company. The allocation is typically proportional to the market value of each company.
  • Low Fees: Index funds have low operating expenses and management fees because they follow a passive investment strategy. Since they automatically track the companies in the index, they don’t require fund managers to conduct extensive research or make active decisions.
  • Market-Tracking Performance: Index funds aim to match the overall performance of the market they track. When the market rises, the value of your investment increases; when it falls, your investment decreases.
  • Our guide to Index Funds explains the investment option in greater detail.

Unlike actively managed funds, index funds don’t rely on fund managers to try to outperform the market. Instead, they provide consistent exposure to the market's performance, making them a cost-effective and straightforward option for many investors.

How Do Index Funds Relate to Exchange-Traded Funds (ETFs)?
Exchange-Traded Funds (ETFs) are, in most cases, a type of index fund, but with a key difference: they are bought and sold on the sharemarket like individual stocks. This makes ETFs a more flexible option for investors who want to trade during market hours.

ETFs vs Index Funds:
  • Trading: ETFs can be traded throughout the day on a stock exchange, whereas traditional index funds are bought or sold at the end of the trading day.
  • Fees: Buying and selling ETFs on the sharemarket incurs transaction fees, whereas traditional index funds typically do not charge fees for contributions or withdrawals.
  • Availability: ETFs are widely accessible. In New Zealand, platforms like Smart offer a variety of ETFs, while platforms such as Kernel, Hatch, Sharesies, Tiger Brokers (NZ) and Stake provide access to US-listed ETFs.
  • Our guide to ETFs vs Index Funds explains the differences in greater detail.

Price Fluctuations:
The price of an ETF changes throughout the trading day based on the value of the underlying index it represents. For example, if the NZX50 rises, the price of an ETF tracking the NZX50 will generally increase as well.

The Specs of Smart

What Smart ETFs are offered, and what’s the difference between each ETF?

Smart provides a diverse range of over 40 Exchange Traded Funds (ETFs), organised into seven distinct categories (New Zealand shares, Australian shares, US shares, International shares, Thematic shares, Property and Bonds and cash​​). 

Below, we outline each ETF along with its annual fee and a direct link to Smart’s detailed page for further information:

New Zealand shares ETFs

  1. Smart S&P/NZX 50 ETF (NZG): Annual fund fee: 0.20%. This fund tracks the performance of the S&P/NZX 50 Index, comprising the 50 largest companies listed on the NZX Exchange. Major holdings include Fisher & Paykel Healthcare and Spark.
  2. Smart NZ Top 50 ETF (FNZ): Annual fund fee: 0.50%. This ETF aims to replicate the performance of the S&P/NZX 50 Portfolio Index, representing the top 50 companies on the NZX by market capitalisation. Investments include leading New Zealand firms across various sectors.
  3. Smart S&P/NZX 20 ETF (NZT): Annual fund fee: 0.60%. This fund focuses on the S&P/NZX 20 Index, which includes the 20 largest and most liquid companies on the NZX. It provides concentrated exposure to New Zealand's blue-chip companies.
  4. Smart NZ Top 10 ETF (TNZ): Annual fund fee: 0.60%. This ETF tracks the performance of the S&P/NZX 10 Index, representing the ten largest companies on the NZX. It offers investors exposure to the most significant players in the New Zealand market.
  5. Smart NZ Mid Cap ETF (MDZ): Annual fund fee: 0.60%. This fund aims to mirror the performance of the S&P/NZX Mid Cap Index, which includes medium-sized companies listed on the NZX, excluding those in the top 10. It provides exposure to the mid-cap segment of the market.
  6. Smart NZ Dividend ETF (DIV): Annual fund fee: 0.54%. This ETF focuses on the S&P/NZX 50 High Dividend Index, comprising companies within the NZX 50 that have a high dividend yield. It's designed for investors seeking income through dividends.

Australian shares ETFs

  1. Smart Australian Top 200 ETF (AUS): Annual fund fee: 0.30%. This fund tracks the S&P/ASX 200 Index, which includes the 200 largest companies listed on the Australian Stock Exchange. Major holdings include BHP, Commonwealth Bank, and CSL, offering diversified exposure to Australia's largest companies.
  2. Smart Australian Top 20 ETF (OZY): Annual fund fee: 0.60%. This ETF replicates the performance of the S&P/ASX 20 Index, which focuses on the 20 largest and most liquid companies in Australia, such as Rio Tinto, Westpac, and Woolworths.
  3. Smart Australian Mid Cap ETF (MZY): Annual fund fee: 0.54%. This fund targets medium-sized companies on the ASX, excluding the top 20, providing exposure to the growth potential of Australia’s mid-cap market segment.
  4. Smart Australian Dividend ETF (ASD): Annual fund fee: 0.54%. This ETF follows the S&P/ASX Dividend Opportunities Index, which includes Australian companies with a track record of paying consistent and high dividends, ideal for income-focused investors.
  5. Smart Australian Financials ETF (ASF): Annual fund fee: 0.54%. This fund mirrors the financial sector within the ASX 200, excluding real estate investment trusts (REITs), offering exposure to banks, insurance providers, and other financial institutions.
  6. Smart Australian Resources ETF (ASR): Annual fund fee: 0.54%. This ETF tracks the S&P/ASX 200 Resources Index, focusing on resource-heavy sectors, including mining, energy, and materials companies such as Fortescue Metals and Woodside Energy.
  7. Smart Australian ESG ETF (AUE): Annual fund fee: 0.46%. This fund invests in the S&P/ASX ESG Index, which includes companies demonstrating strong environmental, social, and governance (ESG) practices, providing a sustainable investment option.

US Shares ETFs

  1. Smart US 500 ETF (USF): Annual fund fee: 0.34%. This ETF tracks the performance of the S&P 500 Index, comprising 500 of the largest listed companies in the United States.
  2. Smart US 500 (NZD Hedged) ETF (USH): Annual fund fee: 0.34%. This ETF tracks the S&P 500 Dynamic Hedged NZD Index, providing exposure to the S&P 500 companies with currency exposure hedged to the New Zealand dollar.
  3. Smart US Large Growth ETF (USG): Annual fund fee: 0.51%. This ETF aims to replicate the performance of the CRSP US Large Cap Growth Index, focusing on large U.S. companies with growth characteristics.
  4. Smart US Large Value ETF (USV): Annual fund fee: 0.51%. This ETF seeks to track the CRSP US Large Cap Value Index, which includes large U.S. companies exhibiting value characteristics.
  5. Smart US Mid Cap ETF (USM): Annual fund fee: 0.51%. This ETF tracks the CRSP US Mid Cap Index, providing exposure to midsize U.S. companies.
  6. Smart US Small Cap ETF (USS): Annual fund fee: 0.51%. This ETF aims to replicate the performance of the CRSP US Small Cap Index, focusing on small U.S. companies.
  7. Smart US ESG ETF (USA): Annual fund fee: 0.34%. This ETF tracks the MSCI USA ESG Screened Index, comprising U.S. companies that meet specific environmental, social, and governance criteria.
  8. Smart US Technology (NZD Hedged) ETF (UST): Annual fund fee: 0.34%. This ETF tracks the S&P 500 Capped 35/20 Information Technology Index, providing exposure to U.S. technology companies within the S&P 500, with currency exposure hedged to the New Zealand dollar.

International shares ETFs

  1. ​Smart Total World ETF (TWF): Annual fund fee: 0.40%. This fund invests in international shares and is designed to track the return on the FTSE Global All Cap Index, providing exposure to a broad range of global companies.
  2. Smart Total World (NZD Hedged) ETF (TWH): Annual fund fee: 0.46%. This fund invests in large American and global companies via the Vanguard Total World Stock ETF, designed to track the return on the FTSE Global All Cap Index. The fund is 100% hedged to New Zealand dollars, so foreign exchange movements do not affect the value of the investment.
  3. Smart Global ESG ETF (ESG): Annual fund fee: 0.54%. This ETF invests in the iShares MSCI World ESG Screened UCITS ETF USD (Acc), designed to track the return on the MSCI World ESG Screened Index, focusing on global companies that meet specific environmental, social, and governance criteria.
  4. Smart Asia Pacific ETF (APA): Annual fund fee: 0.55%. This fund invests in the Vanguard FTSE Pacific ETF, providing exposure to large and mid-cap companies in developed markets within the Asia-Pacific region, including Japan, Australia, and South Korea.
  5. Smart Japan ESG ETF (JPN): Annual fund fee: 0.55%. This ETF invests in the iShares MSCI Japan ESG Screened UCITS ETF USD (Acc), designed to track the return on the MSCI Japan ESG Screened Index, focusing on Japanese companies that adhere to specific ESG criteria.
  6. Smart Emerging Markets ETF (EMF): Annual fund fee: 0.59%. This fund invests in the Vanguard FTSE Emerging Markets ETF, providing exposure to large and mid-sized companies in emerging market economies such as China, India, and Brazil.
  7. Smart Emerging Markets ESG ETF (EMG): Annual fund fee: 0.59%. This ETF invests in the iShares MSCI EM IMI ESG Screened UCITS ETF USD (Acc), designed to track the return on the MSCI EM IMI ESG Screened Index, focusing on emerging market companies that meet specific ESG criteria.
  8. Smart Europe ETF (EUF): Annual fund fee: 0.55%. This fund invests in the Vanguard FTSE Europe ETF, providing exposure to large and mid-sized companies in developed European markets, including the UK, France, and Germany.
  9. Smart Europe ESG ETF (EUG): Annual fund fee: 0.55%. This ETF invests in the iShares MSCI Europe ESG Screened UCITS ETF USD (Acc), designed to track the return on the MSCI Europe ESG Screened Index, focusing on European companies that meet specific ESG criteria.

Thematic shares ETFs

  1. Smart Automation and Robotics ETF (BOT): Annual fund fee: 0.75%. This fund tracks companies in the automation and robotics sector, offering exposure to businesses leading technological advancements in areas like artificial intelligence, robotics, and industrial automation.
  2. Smart Bitcoin ETF (BTC): Annual fund fee: 0.55%. This ETF provides exposure to the price of Bitcoin, enabling investors to track the performance of the leading cryptocurrency without directly owning it.
  3. Smart Gold ETF (GLD): Annual fund fee: 0.55%. This fund mirrors the price of gold, providing investors with a hedge against inflation and a way to diversify their portfolios with exposure to precious metals.
  4. Smart Global Infrastructure ETF (INF): Annual fund fee: 0.60%. This ETF focuses on companies in the global infrastructure sector, including transportation, utilities, and energy infrastructure, providing diversification across essential industries.
  5. Smart Healthcare Innovation ETF (LIV): Annual fund fee: 0.75%. This ETF invests in companies pioneering innovation in healthcare, including biotechnology, pharmaceuticals, and medical devices, offering exposure to the future of healthcare advancements.

Property ETFs​​

  1. Smart NZ Property ETF (NPF): Annual fund fee: 0.54%. This ETF tracks the performance of the S&P/NZX Real Estate Select Index, providing exposure to listed New Zealand property companies and real estate investment trusts (REITs).
  2. Smart Australian Property ETF (ASP): Annual fund fee: 0.54%. This fund invests in Australian property companies and REITs, tracking the S&P/ASX 200 A-REIT Index, which includes major players in the Australian real estate market.
  3. Smart Global Property ETF (GPR): Annual fund fee: 0.60%. This ETF tracks the performance of the FTSE EPRA/NAREIT Developed Index, providing exposure to property companies and REITs in developed markets around the world.

Bonds and Cash ETFs

  1. Smart S&P/NZX NZ Government Bond ETF (NGB): Annual fund fee: 0.20%. This ETF invests in New Zealand government bonds, tracking the S&P/NZX Government Bond Index. It provides exposure to low-risk, fixed-income investments backed by the New Zealand government.
  2. Smart Global Government Bond ETF (GGB): Annual fund fee: 0.44%. This fund tracks the FTSE World Government Bond Index, investing in government bonds issued by developed countries, offering global fixed-income diversification.
  3. Smart Global Aggregate Bond ETF (AGG): Annual fund fee: 0.46%. This ETF replicates the iShares Core Global Aggregate Bond Index, investing in top-rated global bonds, including corporate and government debt, to provide broad fixed-income exposure.
  4. Smart NZ Bond ETF (NZB): Annual fund fee: 0.20%. This ETF invests in a mix of New Zealand government and corporate bonds, tracking the S&P/NZX A-Grade Corporate Bond Index, offering a balance between stability and higher yields.
  5. Smart NZ Cash ETF (NZC): Annual fund fee: 0.20%. This fund invests in New Zealand term deposits, providing a low-risk option for investors seeking stability and short-term cash management.
  6. Smart Global Bond ETF (GBF): Annual fund fee: 0.44%. This ETF invests in a broad range of global bonds, including sovereign and corporate debt, offering diversified exposure to international fixed-income markets.
Know This: Hedging Strategies Vary by ETF
Some Smart ETFs are hedged, while others are not. For any ETF that is hedged, in the instance of the NZ Dollar rising against any overseas currency, the value of the overseas investment is not diminished. Hedging eliminates exchange rate movements as an investment risk. Our guide to hedging explains more.
 
The minimum Initial Investment: $500 for each Smart ETF investment, but you can own a fractional number of any Smart (i.e. if you invest $500, you will own 142.8 shares in an ETF if the current price is $3.50). 

If I buy a Smart ETF, am I buying a share on the sharemarket?
The answer to this is yes. A Smart ETF is a share investing in other shares. But it’s a share by nature. Your investment in Smart is as diversified as the number of companies included in the ETFs you invest into.

​Important information:
  • Are you considering investing in ETFs or index funds? Our comprehensive Kernel vs Smart comparison breaks down the key differences between these two leading players in the index and ETF investment market, helping you make an informed decision.
  • Are you looking for an investing platform that offers a wide selection of funds? Our reviews of InvestNow and Kernel Wealth have you covered. Other investing options (with a US focus, suitable for ETFs): Tiger Brokers offers low FX fees; and Hatch, Sharesies and Stake are widely popular.
  • Are you new to the NZX? Our NZX in a Nutshell guide explains what you need to know about investing and trading.
Your consumer guide to Smart is sponsored by our friends at Kernel, a leading New Zealand-based index fund manager and investing platform.
  • If you're looking to invest in Smart, this guide helpfully takes you through the entire process of what you need to know.
  • Kernel is a passive alternative to ETFs, offering 20+ index funds that aim to offer value and diversification. Our Kernel review explains more.
  • Kernel is 100% Kiwi owned and are committed to no-nonsense index funds with low, transparent fees.
  • Trusted by tens of thousands of Kiwis, Kernel offers easily accessible index fund investing.
  • Kernel's innovative index fund range includes ESG, thematic, commercial property, dividend and infrastructure funds as well as broadly diversified equity funds.

Who is Smart Suited to?

  • Best For: Long-term investors looking for stability and growth that is passive with low management fees. With Smart ETFs, 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: 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.
 
Standout Features:
  1. New Zealand’s largest range of ETFs, with management fees from just 0.20-0.75%
  2. There is a one-off $30 establishment fee, which enables investment in one or as many different shares as you wish. Subsequent investments have no fee applied, and there is no fee to sale Smart ETFs via the Smart platform.
  3. 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.

But be aware:
  1. But, investment allocation can be painfully slow meaning you have uncertainty over purchase price - it can take up to 43 days between buying Smart ETFs and having them allocated to your account. This is unhelpful for people wanting to have certainty or purchase price or move quickly on a market movement.
  2. Certain funds will make investments in companies trading in weapons, tobacco, nuclear and other “unethical” business. If this is a concern, make sure you verify how the fund invests. Our guide to ethical investing has more details. 
  3. As with any 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.

​Important information:
  • Are you considering investing in ETFs or index funds? Our comprehensive Kernel vs Smart comparison breaks down the key differences between these two leading players in the index and ETF investment market, helping you make an informed decision.
  • Are you looking for an investing platform that offers a wide selection of funds? Our reviews of InvestNow and Kernel Wealth have you covered. Other investing options (with a US focus, suitable for ETFs): Tiger Brokers offers low FX fees; and Hatch, Sharesies and Stake are widely popular.
  • Are you new to the NZX? Our NZX in a Nutshell guide explains what you need to know about investing and trading.

Smart's Claims Tested - What You Need to Know

We explain the claims made by Smart include and what they mean: 
​
1) “With one simple purchase you get an investment in a range of securities, such as listed companies or government bonds, spreading your risk more broadly”.

Is it True? Yes. Each fund invests in a specific group of securities, but there are enough investments to diversify your money so you’re not exposed too badly if one company doesn’t perform.
 
2) “The funds keep costs down because in most cases Smart does not need to make active investment decisions, which may require spending on research and analytical expertise”.

Is it True? Yes, the nature of ETFs is passive, and no research and judgement is ever needed to make the investments. Each Smart ETF invests exactly in what it says it will, and this doesn’t change.
 
3) “The funds enable you to build a global portfolio in NZD, without having to worry about the complexity of managing foreign currencies or overseas tax. Distributions are paid in NZD and automatically reinvested for you, unless you choose to receive them in cash”.

Is it True? Yes. You only invest using New Zealand dollars – Smart does the work converting your money into local and international investments. Whatever dividends you receive will be invested into new units in your Smart ETF, but you can choose to have the dividends paid in cash to your bank account.
Your consumer guide to Smart is sponsored by our friends at Kernel, a leading New Zealand-based index fund manager and investing platform.
  • If you're looking to invest in Smart, this guide helpfully takes you through the entire process of what you need to know.
  • Kernel is a passive alternative to ETFs, offering 20+ index funds that aim to offer value and diversification. Our Kernel review explains more.
  • Kernel is 100% Kiwi owned and are committed to no-nonsense index funds with low, transparent fees.
  • Trusted by tens of thousands of Kiwis, Kernel offers easily accessible index fund investing.
  • Kernel's innovative index fund range includes ESG, thematic, commercial property, dividend and infrastructure funds as well as broadly diversified equity funds.

The Competition – Smart vs InvestNow vs Kernel vs Sharesies

Smart, Kernel, InvestNow, Simplicity and Sharesies are just some of the options for index fund investing. You can invest in local and foreign funds and ETFs.

Simplicity Investment Funds is a non-profit fund manager offering low-fee index funds, with fees as low as 0.10% for some funds. Their Conservative, Balanced, and Growth funds are designed for New Zealand investors with varying risk appetites, and their approach emphasises transparency and social responsibility. Simplicity also offers KiwiSaver products, making it a good option for integrated retirement planning.

Kernel Wealth specialises in index investing with a focus on simplicity and low fees. Their offerings include a range of NZ and international index funds, with fees starting at 0.25%. Kernel’s platform is user-friendly and includes tools to help investors set and track financial goals. Kernel also allows for fractional investing, making it accessible to those starting with smaller amounts.

InvestNow provides access to a variety of managed funds and ETFs, including those from Smart ETFs and Vanguard ETFs. The platform charges no transaction or admin fees, allowing you to invest directly in a wide range of funds. It’s an excellent option for investors looking for a one-stop shop with diverse options for both active and passive strategies.

Sharesies is a platform designed for beginner and everyday investors, allowing access to a wide range of NZ and global ETFs, index funds, and individual shares. The platform is known for its fractional investing feature, which makes it accessible to start with as little as $5. Sharesies charges low fees for trades and provides tools to make investing simple and engaging, especially for younger investors.

Detailed Comparison - Kernel vs Smart

Our detailed Kernel vs Smart comparison covers funds and fees, distributions and tax considerations, accessibility, customer support and additional features and frequently asked questions.

MoneyHub Founder Christopher Walsh shares his experience with Smart and Kernel:

"After undertaking our comprehensive research into Kernel vs Smart in detail, the findings made me take action. I am now an investor who has transitioned from Smart to Kernel for my S&P 500 investments. It's important to read this review in detail, given the differences between Smart and Kernel - this is my high-level experience:

One of the primary reasons I switched to Kernel was to avoid the brokerage fees associated with buying and selling ETFs through Smart. With Smart, I only bought, and every transaction required going through a broker (which in my case was Sharesies), which added $25 as I was buying $10,000+ every time. On the other hand, Kernel allows me to invest directly without these extra fees, making it a more cost-effective option to grow my exposure to index funds. 

I also didn't appreciate having to wait four days for Sharesies to get my money back to me, having sold on Friday morning and, unless paying an extra 1.90% to get the funds right away, having to wait until Wednesday. I contrast that to Kernel, which I was already invested in for other funds, which trade daily. If you make a withdrawal request before 4pm (on business days), the money hits the account that evening after Kernel processes buy and sell orders daily, provided they are received before 12pm on a business day. Much faster, much easier.

Tax considerations were also relevant. Kernel operates with Multi-rate PIE funds, which are taxed at the investor's prescribed investor rate (PIR). This means I only pay the tax rate on the dividends that apply to my income level. In contrast, Smart funds are listed PIEs, taxed at a flat rate of 28%. If I were in a lower tax bracket (with a PIR under 28%), this would result in over-taxation. To avoid this, I would need to include the details on my tax return to claim back any overpaid tax on the dividends.

Kernel also offered a few other perks I found useful, including a $1 minimum investment per fund - this would be cost-ineffective with Smart, given brokerage costs and let me keep adding to a fund without brokerage fees sucking up my investments. While I appreciate Sharesies offers subscriptions to minimise these fees, the limitation is that managing and considering is more friction. In contrast, Kernel is a simple bank transfer, and then, a few hours later, it invests in the fund(s) without me being pinged on fees.

I have been with Kernel since 2020 and find the platform intuitive and easy to use, with transparent reporting on fund performance and composition. Smart's direct platform has a very different user experience, and it is not one that I believe is angled at anyone wanting online access.

Selling up my Smart ETFs and moving the money to Kernel has been a strategic move to optimise my investment efficiency and reduce unnecessary costs. The fees are lower overall for my selection of like-for-like funds, and I've avoided Sharesies brokerage going forward.

For those considering a similar transition, Kernel's tax efficiency, lower fees, and additional benefits make it a compelling choice.

This guide has been published to provide insight and help you make informed decisions about your investment strategy. I appreciate Kernel doesn't have the fund choice of Smart, so it won't be for everyone. However, given New Zealanders' continued interest in investing in the S&P 500 and similar indexes, I've made sure we compare every aspect of Smart and Kernel in our guide so you can see the specific differences, whether they're important to you or not".

If you have an experience with Kernel or Smart you'd like to share, please contact our research team.
Christopher Walsh
MoneyHub Founder

10 Things to Know About Smart

Smart also offers a KiwiSaver scheme, previously known as SuperLife

Smart's owner, the NZX, also runs the Smart KiwiSaver Scheme, previously known as SuperLife, and offers investors the ability to pick the Smart portfolio of 45+ ETFs as an investment options.

You don’t need to buy Smart ETFs directly – they have a few investment partners who offer advice

Institutions and investment apps like Sharesies, Forsyth Barr, Craigs, Jarden Direct and ASB Securities are some of many brokers you can contact to buy Smart ETFs from. Some brokers offer personal advice as to the best investment options for your financial situation.

Smart offer excellent investment diversification

An investment in one Smart ETF 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 Smart NZ Top 50 invests in the 50 largest New Zealand listed companies, so you are well diversified. Other funds invest in 500 or more companies, meaning further diversification.

You can make regular investing contributions, starting at $50 a month

If you’d like to make regular contributions to savings outside of a KiwiSaver fund, Smart offers a regular savings plan requiring a minimum monthly contribution of $50. This offers a hassle-free way of saving with Smart and having the funds applied to chosen ETF(s).

The performances of Smart ETFs are transparent

You can check the 1 month, 3 month, 1 year, 3 year and 5 year return on any Smart ETF at any time by visiting the Smart ETF Performance page.  

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

Many of the shares your ETF invests in 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 funds. For example, if you receive a $100 dividend and the ETF is currently priced at $2.00, your ETF will buy 50 more Smarts ETFs on your behalf. This is the best way to increase the value of your investment. 

Smart offers a proven investment model by investing in index funds

Index funds historically outperform managed funds. According to Fortune Magazine, the S&P 500 (an 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.

Smart isn't the only ETF and index fund platform on the market

Simplicity’s investment funds and Kernel Wealth offer index fund investments. The fees are lower than what Smart charges. 

Smart offers 0800 phone support

Smart has a team for customer support. The team however does not provide financial advice.

​Signing up isn't Complicated, but you’ll need to decide what fund(s) to invest in first

Making your initial investment in Smart is like ordering from a menu. You’ll need to decide your initial investment and if you want to make monthly contributions. Once you’ve picked the fund or funds you want to invest in and indicated any ongoing contributions you’d like, 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. 

Our Conclusion

  • For new investors looking to get into the sharemarket, either in New Zealand and/or overseas, Smart delivers an easy to use platform that makes growing a portfolio easy and cheap.
  • Overall, Smart offers the most diverse number of ETFs in New Zealand. Beyond the $30 one-off joining fee, there are no annual membership fees and you can invest in any fund with $500 or more. 
  • But, investment allocation can be painfully slow meaning you have uncertainty over the purchase price. All investments are only processed once a month, with the direct debit run on the 20th (or next business day if the 20th is a non-business day).
  • Units are then purchased at the end of month NTA price and are allocated to the investors CSN on around the 3rd business day of the following month. For example, if you decide to purchase 1000 Smart ETFs on 25 January, your payment won't be taken until 20 February and your 1000 Smart ETFs won't be allocated until 3 March. In that time, you may miss opportunities in the market.
  • Smart does advise that any investor can purchase Smart ETFs on sharemarket by going through a broker. However, the broker will charge a brokerage fee. Using this method, you can get the same-day market price and have the units under your Customer Number two business days later.  Buying from a broker works well for people wanting to have certainty or purchase price or move quickly on a market movement
  • Certain funds appear on other platforms and may have cheaper management fees - if you are looking a particular index, it pays to shop around and compare fund fees if you're serious about a long-term investment.
  • The underlying investment funds offer diversity in the sharemarket (both in New Zealand and overseas) without significant risk.
  • Smart may not appeal to everyone - if you’re fresh into investing, the 45+ funds may be overwhelming.

​Important information:
  • Are you considering investing in ETFs or index funds? Our comprehensive Kernel vs Smart comparison breaks down the key differences between these two leading players in the index and ETF investment market, helping you make an informed decision.
  • Are you looking for an investing platform that offers a wide selection of funds? Our reviews of InvestNow and Kernel Wealth have you covered. Other investing options (with a US focus, suitable for ETFs): Tiger Brokers offers low FX fees; and Hatch, Sharesies and Stake are widely popular.
  • Are you new to the NZX? Our NZX in a Nutshell guide explains what you need to know about investing and trading.
Your consumer guide to Smart is sponsored by our friends at Kernel, a leading New Zealand-based index fund manager and investing platform.
  • If you're looking to invest in Smart, this guide helpfully takes you through the entire process of what you need to know.
  • Kernel is a passive alternative to ETFs, offering 20+ index funds that aim to offer value and diversification. Our Kernel review explains more.
  • Kernel is 100% Kiwi owned and are committed to no-nonsense index funds with low, transparent fees.
  • Trusted by tens of thousands of Kiwis, Kernel offers easily accessible index fund investing.
  • Kernel's innovative index fund range includes ESG, thematic, commercial property, dividend and infrastructure funds as well as broadly diversified equity funds.
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