I would crack straight into answering her question about the SmartShares vs SuperLife comparison but first I needed to duck down to the supermarket to buy some toothpaste (despite the fact I spent an hour at the supermarket the day before doing the biggest shop I have done all year). This is because you are investing in a PIE that invests overseas, and they are forced to use the FDR to calculate tax, which is passed on to the investors in the ETF. It created New Zealand’s first ETF (the NZ Top 10 Fund) in 1996. Currently I use sharesies, and I believe they do not charge fees directly for these products, but I can't help but wonder if there is a better platform for buying and holding smartshares. Fractionalisation. Not suitable for: Passive investors investing less than $100-200 at a time. A $1.50 USD fee is deducted from your first deposit to cover the filing of a compulsory US tax form on your behalf. Vanguard funds not available through InvestNow (eg VOO, VT, etc) are slightly cheaper over the long run to buy through Stake/Hatch. Overtime the benefit of Vanguard’s low fees will really payoff. Fact: In the long-run using Hatch to own directly through Vanguard is better. What is the best way to buy US mutual funds currently from New Zealand? Sharesies vs ASB Securities vs Direct Broking vs Hatch Direct Broking offers the best value fees for big trades (i.e. Should I be looking to move to investnow? I did find a renewable energy ETF on Hatch but Hatch does have some high fees as well.. Also a lot of people seem to be using investnow whereas I went straight to the Smartshares website. I am a long term buy and hold investor for the most part and have really enjoyed the no fee trading and find the no hassle app pretty intuitive. If you’re doing a Sharesies vs InvestNow comparison, you’ll be interested to learn that both providers provide access to managed funds. China, India, Brazil, Indonesia) Further Reading: – Smartshares vs Vanguard vs AMP – International Share Index Fund shootout. But the point about having a large tax advantage below $50,000 is important, as well as the fact you need a larger portfolio before Hatch’s brokering and FX fees being less than the management fee from Smartshares. This means in one year, you’d have fees of $96 USD which is roughly $144 NZD in broker fees, add to this 50 BP of your yearly contribution. You will need to calculate things for yourself for your own investing situation. Let me know if this works out as I am a little vague on the tax side of it. Hatch, Index Funds, Investment, Kids and Money, PocketSmith, Sharesies, Simplicity, SmartShares, ETF Christmas at my house when I was growing up was always a busy, crowded and fun time. over $10,000), but is the most expensive for smaller trades. I'm came across this subreddit while doing some research into Hatch. For these ETFs, it is the underlying fund that contains a portfolio of securities designed to track a specific index. In saying that it is now built up close to the $10,000 mark. The Smartshares NZX-50 Index fund can be swapped for the AMP capital NZ shares fund. Let me assume for these calculations you are at the 33% tax bracket and your PIR is 28%. Deposit money . Now if you add the tax advantage for being under $50,000. 2. Discuss savings, investments, KiwiSaver, debt management, home loans, student loans, insurance, and anything else personal finance-related. Hatch is another Wellington based service owned by KiwiWealth, and they’ve recently reached over 10,000 investors. Best for investing in managed funds. What happens if a fund platform shuts down? The dividend yield for VOO is about 2%, so you are paying 33% x 2% which is 0.66%, under half that you pay with Smartshares. I am after the Vanguard funds too. I'll be comparing them in terms of:1. I was looking at hatch recently because you can choose individual shares and want to invest in renewable energy, especially with the UK going coal free (albeit briefly) for the first time since the industrial revolution and more focus on renewable power it seems like a smart investment. Smartshares will be cheaper of course, and much easier since you just buy an ETF and become instantly diversified. SmartShares is slightly more expensive (<1% difference) than going through Hatch/Stake over the long term if SmartShares has the funds you are after, BUT you end up paying tax through PIE rather than FIF overseas tax rate, which is a lot easier for the average investor. (https://www.smartshares.co.nz). Looking through the past history of VOO about 25% of the years you’d be paying 0% tax on opening value, you can also run simulations using means and standard deviations of the historic index returns and get similar findings. Hatch account holders can buy and sell stocks listed on the New York Stock Exchange and the NASDAQ. Invest in environmentally and socially responsible global equities, megatrends and passive global bonds for the first time with Smartshares. In this video I'll be looking at the two main DIY investing platforms in New Zealand, Sharesies and Investnow. However my question is would I just be better of putting my 500 - 1k into a ETF on Smartshares instead? Hatch offers a simple way to keep fee percentages low by allowing auto-investments into all 2,700+ companies and ETFs. The Smartshares range of ETFs includes socially responsible international equity exposure, access to Robotics & Automation and Healthcare Innovation ‘megatrends’, and passive global bonds. Would I be better to lump transfer that money into the Hatch VOO investment but keep up the regular savings plan to Smartshares? See the Stake/Hatch comparison here: https://old.reddit.com/r/PersonalFinanceNZ/comments/fy5cp1/stake_vs_hatch_fees_explained/fmz1y57/. Understanding fees for smartshares on sharesies, hatch, etc. InvestNow and Smartshares complete trades in under 2 working days. InvestNow and Smartshares is cheaper for smaller portfolio’s, but Hatch is better for large portfolio’s where the broker and FX fees become relatively small. Hatch: Costs 0.03% per annum, and you pay $8 USD per trade, and you are paying 50 basis points in FX fees ($5 per $1000 exchanged). Smartshares, Vanguard, and AMP Capital, all issue, low cost, passively managed funds that invest in international shares. The price of an ETF goes up and down as the index it represents. You will need to calculate things for yourself for your own investing situation. This breakeven point is around $20,000. So yes, if you were going to put $500 to $1000 on an ETF, it would be cheaper through InvestNow given that’s all we are computing cost wise. There’s no minimum deposit amount (really! They have low minimum investment amounts, … Best For: Investors looking for US-listed shares or ETFs not otherwise available to New Zealanders via InvestNow or SmartShares. Or is that just for foreign ones? Index fund fees explained: Index fund fees are shown as a percentage of your investment and charged as an annual fee: So as an example- say you invest in a fund that has a fee of 0.10%, this means that you pay $1 per year for every $1,000 invested. Examples are the Smartshares US 500 ETF (investing in the United States), Smartshares Emerging Markets ETF (investing in emerging markets e.g. Hatch will cost you 0.53% (+$3) in the first year, vs. 0.34% for Smartshares. Hatch also gives investors the ability to buy and sell shares in thousands of funds and companies listed on the Nasdaq and New York Stock Exchange. Hatch, Index Funds, Investment, KiwiSaver, PocketSmith, Sharesies, Sharesight, Simplicity, SmartShares, ETF, Tax With so many new investment platforms coming on stream in the last couple of years, it has never been easier to buy a stake in a company via either an index fund or by buying individual shares. One assumption I’ll use for this example, but feel free to change, is that you have monthly contributions through hatch, this is because you want to trade less frequently while still contributing to your investment. A place to discuss personal finance for New Zealanders. (With some reasonable assumptions of course). A place to discuss personal finance for New Zealanders. Jul 26 Smartshares NZ Top 50 vs S&P/NZX 50 Ruth. This section will look at the different options from each issuer. ETF, ETFs, Hatch, Index Funds, Kernel, Money Education, Sharesies, SmartShares. SmartShares is a member of the NZX Group (the New Zealand stock exchange). That way each time it builds up I can transfer over to the hatch VOO at 0.03% instead of the USF 0.34%. Can someone give an idea of fees if one was to invest $1000 or $5000 through either of these platforms, which will be quicker and if I will receive dividends too whenever these funds announce them? I'm a pretty new at all this but I've had some ETFs from Smartshares since the start of the year (nz50, emerging markets, us 500 and aus dividend). Hatch charges .5% of the interbank FX fee. Press question mark to learn the rest of the keyboard shortcuts. Although your shares will be held by a custodian instead. Kiwi Wealth is a regulated entity – it's a default KiwiSaver provider and part of the Kiwi Group Holdings Limited financial services group, which is owned by NZ Post, The NZ Super Fund and ACC. ... Read our Comparing Sharesies vs Investnow vs Hatch and more guide. If you don't withdraw that money for at least two years, then you only pay 0.03% and pull ahead with Hatch by year three. InvestNow allows you access to Smartshares without the fees. Your money is safe, as it is held separately by the Custodian. With Hatch, you have lost $499 compared to the ROI without fees, and with InvestNow you have lost $4216.So in both cases, a magnitude change in expense ratio results (0.34% vs 0.03%) in a magnitude change in fees paid ($2053.20 vs $207.37), and a magnitude change in lost compounding ($4216 vs $499)- which makes … The difference is both in fees you paid and compound interest lost. A 0.5% fee is included in our estimated exchange rate, and we offer special rates for deposits over $100k. They do not manage your funds – instead they act as a “middleman” between investors and Fund Managers. It's personal preference - how badly do you want to invest in individual shares and renewable energy? That makes me a little uncomfortable. I can only speak from experience and I have been loving the ease of the stake platform. InvestNow and Smartshares is cheaper for smaller portfolio’s, but Hatch is better for large portfolio’s where the broker and FX fees become relatively small. Yes you should invest through InvestNow if you plan on buying Smarshares ETFs when they are on Smartshares. The initial currency conversion fee and trade fee might sting a bit- but over the long term, the lower fund fees offered by iShares could make it cheaper. Press J to jump to the feed. Smartshares looks after all tax obligations for you, so you don't have to file a tax claim as you would if you owned any US shares directly. The platform cannot run away with your money or use it to pay their creditors, nor is the value of your funds or shares affected – after all, it is not the Fund Platform that determines the value of your funds and shares. Sharesies: Sharesies lets you buy and sell shares and ETFs on the New York Stock Exchange, the NASDAQ and the Chicago Board Options Exchange. Vanguard International funds through InvestNow are cheaper than buying them through the US exchange due to FX fees. Smartshares is supervised by the New Zealand Public Trust government organisation, the assets in its ETFs are custodied by BNP Paribas Australasia. We used to receive heaps of Christmas cards and the most exciting ones were the cards that contained the “annual Christmas letter” from the sender. Yes it is for me. If you had over $50,000 you’d be paying anywhere between 0% and 5% tax through the FDR or CV tax methods. You can buy shares in individual companies, as well as exchange-traded funds, that are listed on US stock exchanges.. Hatch offers shares in more than 2,900 individual companies, such as Amazon, Tesla and Disney and more than 500 exchange traded funds, which includes stock indexes … The Competition – InvestNow vs Smartshares and Simplicity . New comments cannot be posted and votes cannot be cast, More posts from the PersonalFinanceNZ community. Smartshares funds are listed on NZX so you … Let’s assume you were investing $400 a week in InvestNow, so you invest $1600 a month through Hatch. Hatch is brought to you by Kiwi Wealth. Hatch/Stake do not, they just give you cash. The businesses behind Hatch It’s safe as the decisions you make. Sharesies offers the lowest fees for share trades up to $3,000 given there's no minimum transaction fee. What can I invest in with Hatch? From what I am aware, buying mutual funds from Smartshares which in turn subscribes to issuers such as Vanguard is a slow process? I guess if I buy funds through Hatch or Stake, I will directly own the mutual fund as opposed to Smartshares which have a mutual fund product invested in Vanguard, say such as the S&P index based fund. InvestNow and SmartShares dividend reinvest so you don't have to worry about it. You would not the purchase transaction to go through after the NAV has increased substantially, say after many days or weeks? A quick note on Index fund fees. It allows Kiwis to invest in more than 140 NZ and global managed funds online, plus provides access to … Who is Hatch Suited to? But at a 5% higher tax rate, you’d be worse off if returns were generally always above positive 5%, and better off it returns were 0% or under 4.2% (breakeven value). InvestNow costs: 0.34% per annum, and you pay 28% on 5% of opening value as tax. If you want to invest in alternatives iShare funds than what’s on offer from Smartshares through Investnow, and SuperLife, and you had a large chunk of change to invest, I would suggest Hatch. For this example I will use the S&P 500. Discuss savings, investments, KiwiSaver, debt management, home loans, student loans, insurance, and anything else personal finance-related. Overtime the benefit of Vanguard’s low fees will really payoff. The tax and fees difference will have a far greater effect than a day or 3 price movement. The first having a fee of 0.5% and the second having a fee of 0.33, with the only difference being that the AMP fund tracks the NZ-50 index closely, whereas the Smartshares NZX-50 fund has a maximum weighted cap of 5% for individual companies making up the fund. That's not to say that Hatch, Stake or Sharesies are inherently unsafe, just less safe. Hatch: Hatch provides access to over 2,900 companies and more than 500 ETFs listed on US share markets. Our Thoughts on Hatch: While you pay $3 per trade, the FX fee is half what Stake charges (0.50% vs 1.00% - and no $2 minimum fee) which is a significant benefit. You can do an off market transfer to InvestNow if you wanna switch to them. Fund Platforms are a good option for everyone – both beginners and experts – as they allow you to invest in lots of different funds under one roof. Now I’m going to exclude the management fees for this calculation, but let’s try find the amount you need in your portfolio to have equivalent fees to what you’d get through InvestNow. Fund Platforms are services that offer you access to a variety of different funds to invest in, sometimes described as a “Fund Supermarket”. Some of the Smartshares ETFs gain exposure to global markets by investing directly in an underlying fund. They charge an admin fee, but have a nicer front end than NZX and are a little more flexible. 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