The S&P 500 is the most-searched investment term in New Zealand — a lot of NZ investors want exposure to the 500 largest US companies. In 2026, there are multiple ways to get it, each with different costs, tax implications, and platforms.
For most NZ investors, the Kernel S&P 500 Fund (0.25% p.a.) or InvestNow Foundation Series International Shares Fund (0.20% p.a.) are the best options. Both are NZ-domiciled PIE funds — no FIF tax complexity, PIR capped at 28%, no brokerage. Buying US ETFs (VOO, SPY) directly via Hatch or Stake is an alternative but triggers FIF above $50,000 and adds FX costs.
Option 1 — NZ-Domiciled PIE Funds (Recommended for Most)
These are NZ-registered funds that track the S&P 500 or similar indices. You invest in NZD, pay tax at your PIR rate, and avoid FIF complexity.
| Fund | Platform | Fee | What it tracks |
|---|---|---|---|
| Kernel S&P 500 Fund | Kernel | 0.25% p.a. | S&P 500 index |
| Smartshares US 500 ETF (USF) | NZX / Smartshares | 0.34% p.a. | S&P 500 index |
| Foundation Series International Shares Fund | InvestNow | 0.20% p.a. | Developed markets (includes ~65% US) |
| Foundation Series Total World Fund | InvestNow | 0.25% p.a. | All-world (includes ~60% US) |
Kernel S&P 500 Fund
The most direct S&P 500 exposure available as a NZ PIE fund. Tracks the index via the underlying Vanguard S&P 500 ETF (VOO) wrapped into a NZ fund structure. Available for $1 minimum on Kernel with auto-invest.
Smartshares US 500 ETF (USF)
An NZX-listed ETF that also tracks the S&P 500. Slightly more expensive (0.34%) but tradeable on the NZX during market hours — useful for investors who already have an NZX brokerage account. Available via Sharesies, Tiger Brokers, or directly through Smartshares.
Foundation Series International Shares Fund (InvestNow)
Not a pure S&P 500 tracker — it tracks the broader MSCI World index (developed markets). Roughly 65% of the portfolio is US companies, so it provides significant S&P 500 exposure with global diversification on top. Cheapest option at 0.20% p.a.
Option 2 — Direct US ETF Purchase (Hatch, Stake, Tiger Brokers)
You can buy VOO, SPY, IVV, or any other S&P 500 ETF directly on a US exchange through Hatch, Stake, or Tiger Brokers. These are the same ETFs global investors use.
| ETF | Expense ratio | Exchange | Annual fee |
|---|---|---|---|
| VOO (Vanguard S&P 500 ETF) | 0.03% | NYSE Arca | Extremely low |
| SPY (SPDR S&P 500 ETF) | 0.09% | NYSE Arca | Low |
| IVV (iShares Core S&P 500 ETF) | 0.03% | NYSE Arca | Extremely low |
These ETFs are cheaper than their NZ-domiciled equivalents (0.03% vs 0.25%). But the total cost calculation changes when you factor in NZ-specific considerations.
The costs of buying direct
FX on purchase and sale: 0.20%–0.70% each way depending on platform.
Brokerage: $3–USD$1.99 per trade.
FIF tax above $50,000: Once your cost price of overseas investments exceeds $50,000, you pay tax on 5% of the opening portfolio value each year regardless of actual gains. See FIF Tax NZ.
Tax rate: FIF income is taxed at your marginal rate (up to 39%), not your PIR (capped at 28%).
Example comparison for a $100,000 portfolio, 8% gross return, marginal rate 33%:
| NZ PIE fund (Kernel S&P 500) | Direct VOO via Hatch | |
|---|---|---|
| Fund/ETF fee | 0.25% = $250 | 0.03% = $30 |
| FX (buy once, hold) | $0 | ~$500 (0.5% on $100k) |
| Tax rate on returns | 28% (PIR cap) | 33% (marginal) |
| FIF income taxed | $0 (PIE fund) | $4,000 (5% × $100k) |
| Tax on FIF income | $0 | $1,320 (33% × $4,000) |
| Total first-year cost | ~$250 | ~$1,850 |
The 0.03% ETF fee advantage of VOO is completely overwhelmed by the FIF tax and FX costs. For NZ investors with balances above $50,000, direct US ETF purchase is almost always more expensive than a NZ PIE fund equivalent.
Below $50,000: The FIF advantage disappears (no FIF below the threshold), but FX costs and the 33% marginal tax on dividends (vs 28% PIR) still make PIE funds competitive.
Option 3 — KiwiSaver with S&P 500 Exposure
Most growth KiwiSaver funds have significant US equity exposure — some are 50–70% US shares. If you’re maximising your KiwiSaver contributions (employer match, government top-up), this is already providing S&P 500 exposure as part of a diversified fund.
You can also choose KiwiSaver funds with explicit US market mandates. Kernel’s KiwiSaver Growth Fund includes global shares (predominantly US). Simplicity’s KiwiSaver Growth Fund is similar.
KiwiSaver is the most tax-advantaged vehicle available to NZ investors for long-term growth — prioritise it before additional direct investing.
Which Option Should You Choose?
| Situation | Recommendation |
|---|---|
| Starting out, under $50k | Kernel S&P 500 Fund or InvestNow Foundation Series |
| Over $50k, wants S&P 500 specifically | Kernel S&P 500 Fund (0.25%) — avoids FIF |
| Over $50k, wants absolute lowest fee | InvestNow Foundation Series International (0.20%) — not pure S&P 500 but similar exposure |
| Active trader, US citizen, comfortable with FIF | Direct VOO via Interactive Brokers |
| Already on NZX brokerage | Smartshares US 500 ETF (USF) via existing broker |
Historical S&P 500 Performance (NZD)
The S&P 500 in NZD terms has delivered strong long-run returns, though currency movements add volatility:
- 10-year annualised return to 2025 (NZD, approximate): ~13–15% p.a. (benefiting from a weakening NZD)
- 2022 bear market: -20% to -25% in NZD terms
- 2020 COVID crash and recovery: -30% peak-to-trough, recovered within ~6 months
Past performance does not guarantee future returns. Currency effects (NZD/USD movements) add a layer of variability to NZD-denominated returns from US investments.
Frequently Asked Questions
Is the S&P 500 the best index to track? It has a strong track record but is 100% US — a significant concentration. A global index (MSCI World or All World) adds diversification across Japan, EU, UK, and other developed markets. For NZ investors already exposed to the NZX through KiwiSaver, adding the S&P 500 via a NZ PIE fund is a reasonable approach.
Should I use a hedged or unhedged S&P 500 fund? Hedged funds remove NZD/USD currency risk — they return what the S&P 500 returns in USD, converted to NZD at the hedged rate. Unhedged funds fluctuate with the NZD/USD rate — if NZD weakens, your returns are amplified; if NZD strengthens, returns are reduced. Most NZ investors use unhedged for long-term holdings, but either is valid. See Currency Hedged vs Unhedged ETFs NZ.
Can I buy S&P 500 ETFs through Sharesies? Yes — Sharesies offers Smartshares US 500 ETF (USF) on the NZX, and also allows direct purchase of VOO/SPY/IVV via the US market. USF is the simpler NZ PIE fund option. Direct VOO triggers FIF above $50,000.