ETF and index fund investing is the cornerstone of low-cost passive investing in New Zealand. But your platform choice can cost you as much or more in fees than the ETFs themselves. Here’s how to pick the right one.
InvestNow or Simplicity are the cheapest platforms for NZ ETF/index fund investing — no platform fee, low fund fees (0.10–0.20%). Kernel is a close third at 0.25% with a better app. Sharesies adds 0.50% p.a. platform fee on top of fund fees — avoid it for pure index fund investing. For US ETFs (VOO, VTI), use Tiger Brokers or IBKR.
The Two Types of ETF Investing in NZ
Option 1: NZ PIE managed funds (technically not ETFs, but functionally similar) These track the same indices as ETFs but are structured as NZ PIE managed funds rather than exchange-traded instruments.
- Examples: InvestNow Foundation Series, Simplicity Growth Fund, Kernel High Growth
- Taxed at PIR (max 28%) — no FIF above $50,000
- Auto-invest available (no trading required)
- Cannot be bought/sold intraday
Option 2: NZX-listed ETFs (Smartshares) or US-listed ETFs True ETFs traded on the NZX or US markets.
- Examples: Smartshares TWF (NZX), VOO (NYSE)
- NZX ETFs: PIE, no FIF. US ETFs: non-PIE, FIF above $50,000 NZD
- Buy/sell intraday on exchange
For most long-term NZ investors: PIE managed funds are superior on cost, tax efficiency, and simplicity.
Platform Comparison for ETF/Index Fund Investing
| Platform | Fund fee | Platform fee | Total cost | PIE? | Auto-invest |
|---|---|---|---|---|---|
| Simplicity | 0.10% | $0 | 0.10% | ✅ | ✅ |
| InvestNow | 0.20% | $0 | 0.20% | ✅ | ✅ |
| Kernel | 0.25% | $0 | 0.25% | ✅ | ✅ |
| Smartshares (direct) | 0.20–0.54% | $0 | 0.20–0.54% | ✅ | ❌ |
| Sharesies (Smartshares) | 0.20–0.54% | 0.50% | 0.70–1.04% | ✅ | ✅ |
| Tiger Brokers (US ETFs) | 0.03–0.07% | ~$0 | 0.03%+FX | ❌ | ❌ |
| IBKR (US ETFs) | 0.03–0.07% | $0 | 0.03%+FX | ❌ | ❌ |
Best Platform by Use Case
Lowest cost, broadest diversification, NZ PIE
Winner: Simplicity (0.10%)
- Simplicity Growth Fund: globally diversified, NZ-included, ESG exclusions
- $1,000 minimum but unbeatable fee
- No platform fee, no fund selection needed
Lowest cost with fund choice
Winner: InvestNow Foundation Series (0.20%)
- 20+ Foundation Series funds plus 100+ other managed funds
- Choose your NZ/global split, bond allocation
- $250/fund minimum, no platform fee
Best app, $1 minimum
Winner: Kernel (0.25%)
- Excellent mobile app, $1 minimum
- KiwiSaver integration
- S&P 500, Global 100, NZ 20 — more specific index access
NZX-listed ETFs at lowest cost
Winner: Smartshares direct account or Tiger Brokers
- Smartshares TWF (0.20%) via direct account or NZX broker
- Tiger Brokers: low brokerage, NZX access, competitive FX for US ETFs
US ETFs at lowest total cost
Winner: Tiger Brokers or IBKR
- Tiger: 0.20% FX, NZX access, good NZ support
- IBKR: 0.08–0.20% FX, $0 brokerage (Lite), most competitive for large amounts
- Both: FIF tax above $50,000 NZD applies — factor into total cost
Fee Impact Over Time
$100,000 invested, 8% annual return, 20 years
| Platform | Total fee | Portfolio after 20 years |
|---|---|---|
| Simplicity (0.10%) | ~$30,000 in fees | ~$431,000 |
| InvestNow (0.20%) | ~$58,000 in fees | ~$415,000 |
| Kernel (0.25%) | ~$72,000 in fees | ~$408,000 |
| Sharesies (0.70%) | ~$190,000 in fees | ~$355,000 |
Rough estimates. Fees compound with the portfolio value — exact calculations depend on market performance.
The difference between Simplicity (0.10%) and Sharesies (0.70%) on $100,000 over 20 years: approximately $76,000 — nearly the starting investment, lost to fees.
Common Mistakes in ETF Platform Selection
Choosing based on app design alone: Sharesies has a great app but adds 0.50% platform fee. Over 20 years, that’s a huge cost.
Not accounting for PIE vs non-PIE: US ETFs (VOO, VTI) seem cheaper (0.03% fee) but:
- Dividends taxed at marginal rate (not PIR max 28%)
- FIF tax above $50,000 adds ~1.65% at 33% rate
- No auto-invest — requires manual trades
Choosing based on familiarity with your main bank: ANZ Investments and other bank-linked funds typically charge 0.80–1.50% — far higher than InvestNow or Simplicity.
Not setting PIR correctly: Overpaying tax on returns is a real cost. Always provide the correct PIR when opening an account.
Verdict
| Investor type | Best platform |
|---|---|
| Lowest possible fee, simple one-fund | Simplicity |
| Control over NZ/global split, moderate cost | InvestNow |
| Best app, $1 minimum, KiwiSaver integration | Kernel |
| NZX shares + index funds | Sharesies (accept the fee) or Tiger + InvestNow |
| US ETFs, larger portfolio | Tiger Brokers or IBKR |
| US ETFs, beginners | Stake (simpler than IBKR) |