The Competition – InvestNow vs Smartshares and Simplicity . If you had an opening value of $100, you are paying tax on $5 (5% through FDR), and will pay PIR x $5, which at 0.28% is $1.4. Sharesies offers the lowest fees for share trades up to $3,000 given there's no minimum transaction fee. 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. New comments cannot be posted and votes cannot be cast, More posts from the PersonalFinanceNZ community. Vanguard funds not available through InvestNow (eg VOO, VT, etc) are slightly cheaper over the long run to buy through Stake/Hatch. You will need to calculate things for yourself for your own investing situation. However my question is would I just be better of putting my 500 - 1k into a ETF on Smartshares instead? Exchange Traded Funds (ETFs) are, in almost all cases, index funds, except investors buy and sell their holdings on a sharemarket. Here is a helpful breakdown of Hatch v Stake that people much smarter than me put together: https://docs.google.com/spreadsheets/d/1mbCDBYvCpgHzrz24f9rc9P8tAiV1l08xHrdcA50dbFM/edit#gid=0, and here is my founders code if you want to check out stake: JENNIFERT982. Hatch is another Wellington based service owned by KiwiWealth, and they’ve recently reached over 10,000 investors. Will I earn dividends directly from owing a fund through Hatch or Stake? Who is Hatch Suited to? See the Stake/Hatch comparison here: https://old.reddit.com/r/PersonalFinanceNZ/comments/fy5cp1/stake_vs_hatch_fees_explained/fmz1y57/. SmartShares is a member of the NZX Group (the New Zealand stock exchange). The Smartshares NZX-50 Index fund can be swapped for the AMP capital NZ shares fund. 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. Overtime the benefit of Vanguard’s low fees will really payoff. Invest in environmentally and socially responsible global equities, megatrends and passive global bonds for the first time with Smartshares. Smartshares funds are listed on NZX so you … Let me know if this works out as I am a little vague on the tax side of it. Hatch/Stake do not, they just give you cash. 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. The fixed cost % depends on how much you invest, obviously. 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 … 2. You’d be investing 20,800 a year and have FX fees of $104 NZD, add to this $144 NZD to get $248 in total fees to Hatch. 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. I can understand a few days difference but with competition now from Stake, Hatch to other providers, I would expect the process to be quicker than wait for a long time. 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. It allows Kiwis to invest in more than 140 NZ and global managed funds online, plus provides access to … They have low minimum investment amounts, … For these ETFs, it is the underlying fund that contains a portfolio of securities designed to track a specific index. I’ve had a number of emails asking about the changes to Smartshares, in particular the introduction of their new S&P/NZX 50 ETF (NZG) and how it compares to their existing NZ Top 50 ETF (FNZ). 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. I can only speak from experience and I have been loving the ease of the stake platform. Examples are the Smartshares US 500 ETF (investing in the United States), Smartshares Emerging Markets ETF (investing in emerging markets e.g. Would it be better to buy US mutual funds through Hatch or Stake NZ instead? Jul 26 Smartshares NZ Top 50 vs S&P/NZX 50 Ruth. The price of an ETF goes up and down as the index it represents. 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 … Smartshares charges a $30 setup fee when you first apply, while annual management fees vary depending on the fund you choose and range from 0.20% to 0.75%. Smartshares, Vanguard, and AMP Capital, all issue, low cost, passively managed funds that invest in international shares. Is speed an important factor when purchasing mutual funds? Hatch will cost you 0.53% (+$3) in the first year, vs. 0.34% for Smartshares. 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. If you had over $50,000 you’d be paying anywhere between 0% and 5% tax through the FDR or CV tax methods. Smartshares is supervised by the New Zealand Public Trust government organisation, the assets in its ETFs are custodied by BNP Paribas Australasia. This is high tax. You can do an off market transfer to InvestNow if you wanna switch to them. Best For: Investors looking for US-listed shares or ETFs not otherwise available to New Zealanders via InvestNow or SmartShares. (https://www.smartshares.co.nz). For this example I will use the S&P 500. 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. 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. People with Hatch accounts can invest in a wide range of US-listed shares. Smartshares offers New Zealand's most extensive selection of ETFs, but other investment platforms like Hatch, Stake and Sharesies offer US-listed ETFs. 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. The difference is both in fees you paid and compound interest lost. Hatch customers can invest as soon as a new listing hits the share markets, allowing Kiwis to be among the first to benefit from the success of the world's most recognisable brands. Overtime the benefit of Vanguard’s low fees will really payoff. That way each time it builds up I can transfer over to the hatch VOO at 0.03% instead of the USF 0.34%. 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. Understanding fees for smartshares on sharesies, hatch, etc. Fractionalisation. Let me assume for these calculations you are at the 33% tax bracket and your PIR is 28%. Wait... Investnow means that you don't own the Smartshares? ), just add money to Hatch via internet banking. If you’re doing a Sharesies vs InvestNow comparison, you’ll be interested to learn that both providers provide access to managed funds. US shares: Stake vs Hatch vs Sharesies; NZ shares: Sharesies vs InvestNow vs Smartshares; Launched in March 2017, InvestNow is an online investment platform based in New Zealand. Hatch gives you more control over what you invest in although you pay for it with fx costs and brokerage. 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. It's personal preference - how badly do you want to invest in individual shares and renewable energy? Yes you should invest through InvestNow if you plan on buying Smarshares ETFs when they are on Smartshares. Vanguard International funds through InvestNow are cheaper than buying them through the US exchange due to FX fees. 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. The Hatch option could be more cost-effective for investors who make fewer and/or higher value trades. $248 / 0.34% gives us $73000 with rounding, so you need around $70,000 for Hatch to start to break even, excluding tax. That's not to say that Hatch, Stake or Sharesies are inherently unsafe, just less safe. 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. 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. I am after the Vanguard funds too. 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. Hands down, InvestNow offers a lot more investment opportunities than Simplicity (3 funds) and Smartshares (40+ ETFs). Some of the Smartshares ETFs gain exposure to global markets by investing directly in an underlying fund. Smartshares will be cheaper of course, and much easier since you just buy an ETF and become instantly diversified. What can I invest in with Hatch? Hatch: Hatch provides access to over 2,900 companies and more than 500 ETFs listed on US share markets. Fund Platforms are services that offer you access to a variety of different funds to invest in, sometimes described as a “Fund Supermarket”. The Smartshares range of ETFs includes socially responsible international equity exposure, access to Robotics & Automation and Healthcare Innovation ‘megatrends’, and passive global bonds. 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). 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. Press J to jump to the feed. Or is that just for foreign ones? 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. A quick note on Index fund fees. Which is represented by Smartshares U500 (USF) on InvestNow and VOO on Hatch. Press J to jump to the feed. 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. The tax and fees difference will have a far greater effect than a day or 3 price movement. 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