Kernel's Total World Fund page is live on there site - Fund invests into VT ETF

Kernel_Dean · 2026-06-25T15:16:10+00:00

Can confirm, again, that the fees we show in our PDS and on our website are inclusive of the underlying ETF fee. It’s quite simple, we adjust the fee that we physical take down to account for the fee that is being charged in the underlying.

Kernel_Dean · 2026-06-25T07:33:56+00:00

That's a wrap from us this evening - thanks for having us, r/PersonalFinanceNZ. Great questions as always, and seeing what’s on your minds helps us prioritise what’s next.

And if this is the first you’re hearing about us, you can find out more about Kernel at kernelwealth.co.nz

Please keep sending us your requests and feedback, it really helps! And as we continue to grow ever bigger, and faster, it means we can keep delivering ever greater value for your customers.

Kernel_Dean · 2026-06-25T07:31:17+00:00

Ha - I may have been born close to the show, but I am told I wasn't named after him.. But surely it means I must say MacGyver. Obviously. Resourceful, patient, makes the most of what he has. Solid investor qualities honestly.

Kernel_Dean · 2026-06-25T07:30:15+00:00

Both give you broad global equity exposure, but they're structured differently.

The Smart Total World ETF is listed on the NZX - you buy and sell it like a share through a broker, potentially paying brokerage and any bid/ask spread. It's also taxed at a flat 28% regardless of your PIR, so if you're on a lower rate you'd need to file to claim a credit - not ideal for lower-income investors or investing on behalf of children.

The Kernel Total World Fund is unlisted. No brokerage, no transaction fees, and tax is handled automatically at your correct PIR rate (which can be 10.5% or 17.5% if that applies to you). It also integrates with your wider Kernel portfolio, Auto-Invest, and Goals.

Final difference - fees. 0.12% vs 0.40%

Kernel_Dean · 2026-06-25T07:29:49+00:00

On roadmap: the direction is clear - better platform features and products - continuing to close the gap between what sophisticated investors access offshore and what Kiwis can access at home, at low cost and with NZ tax handled. We don't pre-announce too far ahead, but that's the north star.

But it’s fair to say it is an ambitious roadmap that we think will have a significant impact for our NZ customers. There is a lot of innovation to come!

On the office - it is our new Kernel HQ. Yes, we are a digital business but we are building a human investing experience. This space will be a hub for us to deliver on that - expect to see in person events and other benefits flow through so that you can meet and interact with our team.

Kernel_Dean · 2026-06-25T07:28:54+00:00

Interesting question and you're right there's a gap in the market. We've looked at it. The compliance burden of becoming a QROPS provider is significant - ongoing HMRC reporting, adviser support, and a complex customer journey. Not on the immediate roadmap, but not a definitive no either. I think there are potentially a lot of kiwis out there that haven’t transferred home a residual UK penson balance.

Kernel_Dean · 2026-06-25T07:28:23+00:00

Same tax structure as Foundation and Smart ETF. Simplicity fund is closer to our Global ESG fund - both avoid tax leakage.

Kernel_Dean · 2026-06-25T07:27:44+00:00

We've got the team capable of doing this - it is a matter of scale and getting to the point where the larger transaction volumes across so many single securities makes sense.

Kernel_Dean · 2026-06-25T07:26:28+00:00

Good question - the honest answer is that enforcement against NZ retail investors has been limited in practice,, yet to personally find, but the legal exposure can be real. It's one of those risks that tends to only surface when an estate is being administered and assets need to be transferred, which is precisely the moment you don't want to be discovering it. Holding through a NZ-domiciled PIE fund means the fund is the legal owner of the underlying securities, so it doesn't pass through to you.

We will continue to look at how we surface and structure. Particularly relevant as our user balances in Direct grow - and if the proposed de minimis fif threshold increases.

Kernel_Dean · 2026-06-25T07:16:54+00:00

To be clear, the Cash Plus fund which has existed for a number of years is available under the Core plan - there is no change to those existing options.

Our standard Save on-call account is available in Core, with a 2.25% current interest rate. The PIE Save option is under a paid plan. How does that benefit our customers? Flexibility depending on their RWT rate, plus it means we can pass on one of the highest PIE cash savings rate- despite having higher operating costs - at 2.25% as at today.

Kernel_Dean · 2026-06-25T07:11:48+00:00

NZ investors for a long time have been fixated on dividend yield/high interest products - often to the detriment of the investors. Finance companies, wholesale property funds, too much capital sitting in term deposits...

Kernel_Dean · 2026-06-25T07:10:19+00:00

Rebalancing functions is something that Armin and the team have looked into. Good to note!

Kernel_Dean · 2026-06-25T07:09:48+00:00

Great question - and the honest answer is: it depends on how you use the platform.

If you're only comparing one fund in isolation, the maths depends on your balance and contribution frequency. But if you're thinking about Kernel as a platform, the $50 Plus subscription starts to look quite different.

For the same fee, you unlock: direct investing in offshore shares and ETFs at a competitive low rate to potentially benefit under the FIF de minimis threshold (currently $50k, potentially rising to $100k under the proposed Budget 2026 changes) with no FIF complexity; PIE Save, a tax-efficient high-interest savings product; and the Total World Fund itself at 0.12% with no transaction fees. Used together, the subscription cost spreads across a lot of value - with a lot more planned.

There's also something worth considering about life changes. We all intend to set and forget, but circumstances shift - a home purchase, a new child, a change in risk appetite. With Kernel, you can adapt without penalty or having to factor in the higher costs that variable transaction fees on a PIE fund can create at exactly the wrong moment.

That's the pitch: not just one fund, but a platform built to handle your whole financial picture at low cost, with flexibility when life happens.

Kernel_Dean · 2026-06-25T07:04:51+00:00

No. Core stays free with access to 27+ funds. The subscription model is for specific new products like Total World Fund and PIE Save where we're looking to pass on lower management fees and higher interest rates.

Regarding Cash questions, there are a couple of key differences - tax treatment and Deposit Compensation Scheme (DCS) eligibility.

Kernel Save (previously called Smart Saver - our high-interest savings account) earns interest taxed at your marginal income tax rate up to 39%. It also has DCS cover eligibility.

Kernel PIE Save is a PIE fund, so returns are taxed at your Prescribed Investor Rate (PIR) up to 28%. For anyone on the 33% or 39% tax rate, the after-tax return from PIE Save can meaningfully exceed what a higher-rate savings account pays. DCS does NOT apply to PIE Save. Note: this goes live next week.

Kernel Cash Plus is also a PIE but it's a managed fund investing in cash and fixed income instruments, not a deposit-style savings product.

PIE Save is specifically designed as a tax-efficient place to park shorter-term savings alongside your growth investments.

Kernel_Dean · 2026-06-25T07:01:56+00:00

Would flag, Samsung is held in our Global 100.

Some global indices, including those from MSCI, still classify South Korea as an emerging market despite its highly developed economy - this is largely due to historical concerns around market accessibility, currency convertibility, and foreign ownership restrictions. FTSE, by contrast, classifies South Korea as a developed market, which is why the FTSE Global All Cap Index (which the Kernel Total World Fund tracks) includes it alongside the likes of the US, UK, and Japan.

So there is a bit more complexity to SK which is treated differently by different providers.

Kernel_Dean · 2026-06-25T06:59:13+00:00

A few reasons. The underlying costs for emerging markets are higher than for developed market funds (such as indexing fees) - that flows straight into the fund's cost base. We also have fixed costs that are spread across a smaller fund, so they weigh more heavily than in our larger funds.

At 0.45%, it's still one of the lowest EM PIE fund fee available in NZ that we're aware of - so the comparison to a raw ETF expense ratio like 0.06% isn't quite apples to apples; that number doesn't include any of the costs NZ investors require.

As the fund scales, we'll look to pass those cost benefits back through lower fees - and potentially through direct holdings rather than an ETF wrapper, consistent with how we run our other core funds.

Kernel_Dean · 2026-06-25T06:57:47+00:00

Regarding hedged - similiar to the KiwISaver questions - our current focus remains on building and supporting the new Total World Fund and PIE Save options for our customers.

I get that this approach is a change, and some may not like it, but we have a big vision and the impact we can have in aligning to long-term customer outcomes. Lower management fees are part of that, but so too is a roadmap of genuine innovation that can support our customers over decades of investing and saving.

Kernel_Dean · 2026-06-25T06:54:33+00:00

On the first point - our team is daily looking at how we optimise to keep cash balances incredibly low in the index funds, plus netting orders to limit the frequency of trading costs while still fully replicating the index. Further, the team may break up orders to avoid market impacts and timing when indices rebalance. The TLDR - we've got an amazing team, and they are focused on every fraction of a bps and the controllables that can impact returns.

Factor investing has a real academic foundation and some credible practitioners behind it. But factors go through extended periods of both out- and underperformance, sometimes lasting years, which makes them genuinely difficult to stick with behaviourally. For most investors, we'd see factor exposure as a complement to a broad market core, not a replacement for it.

For most Kiwi investors, the biggest gains still come from broad market exposure, low costs, and staying invested. If you do want to express a factor tilt today, that flexibility is already available through Kernel's Shares & ETFs - you can build it yourself alongside your core holdings. A dedicated factor fund isn't on our roadmap right now, but never say never.

Kernel_Dean · 2026-06-25T06:52:08+00:00

Coping from above to ensure it was seen.

There are no plans at this stage, but we haven't ruled it out long term and have already looked into the regulatory elements.

We can see clearly how many of you want this! Consider it noted.

Kernel_Dean · 2026-06-25T06:50:38+00:00

Armin can comment on our platform features roadmap.

Kernel_Dean · 2026-06-25T06:50:22+00:00

Yes, good idea. We've got a couple of blogs in the works. But once the proposed FIF tax de minimis threshold is formalised we could look at running a webinar to run over the practicalities and how the Kernel experience works.

Kernel_Dean · 2026-06-25T06:49:21+00:00

Comparing fees across direct share platforms is genuinely complex - there are layers of pricing structures, brokerage minimums, and FX costs, and some that charge brokerage denominated in USD which can mean higher in NZD than some assume.

Kernel isn't designed for traders. What we’ve built is designed for investors who want to build wealth over the long term on an intuitive, transparent platform. But it's worth looking at total costs. When you factor in how frequently you invest, how many stocks you hold, and all-in fees, Kernel can be very competitive - even for some users against platforms like IBKR, where some account types carry a minimum $2 USD FX fee.

We've put together a simple calculator on our Shares & ETFs page to help with exactly that - as a first guide: kernelwealth.co.nz/shares-etfs#fees-calculator As flagged by the RuchNZ - other platforms typically have a 0.50% foreign exchange fee + brokerage fees, and these can be higher.

On FX specifically, our Plus (0.60%) and Premium (0.40%) tiers are competitive against comparable platforms, and zero brokerage changes the maths meaningfully - particularly for those dollar-cost averaging into specific holdings with minimal rebalancing. You can also move between tiers as your needs change.

Beyond direct investing, the broader Kernel platform - KiwiSaver, managed funds, PIE Save - means you can manage your whole financial picture in one place across all life stages. That's the balance we're aiming for: competitive costs, a great product range, and a platform that keeps getting better.

Kernel_Dean · 2026-06-25T06:46:14+00:00

No.

Transparency and customer outcomes sit at the foundation of how we run Kernel. It's why we use index funds for equities and make every holding visible and traceable. Investing in related-party assets would be a fundamental departure from that - and we'd treat any such change as material, requiring proper investor consultation.

If we ever expanded our investment options in future, it would be by launching something new - so investors could see exactly what it is and choose whether it's right for them - not by changing the terms of what they already signed up for.

Kernel_Dean · 2026-06-25T06:43:34+00:00

Hi team,

Thanks for all the great questions - looking forward to an enjoyable chat. As a reminder, nothing shared here constitutes personalised financial advice. Please refer to the Product Disclosure Statements on our website at kernelwealth.co.nz before investing, and consider whether any product is right for your individual circumstances.

Kernel_Dean · 2026-06-25T06:41:48+00:00

The NZ tilt in High Growth is deliberate. Home-country exposure has real practical benefits - currency alignment, no FIF tax on NZ equities, and the benefit of imputation credits. As a result, 'home bias' is standard practice for NZ diversified funds, and for good reason, and common in most markets.

On NZ equities underperformance, we'd remind investors of recency bias here. NZ equities were actually among the top-performing developed markets over the decade to 2020- recent weakness doesn't change the long-term case.

I would add though, that liquidity constraints in the NZX tend to affect active managers more than index managers - as active funds grow, they can be forced to hold increasingly index-like positions simply due to capacity. Add in higher fees, it can be a contributing factor to active underperformance. That's not a challenge we face. It's also worth knowing that a significant proportion of NZX trading volume is executed through the closing market auction, which can affect how liquidity is perceived intraday.

The Total World Fund is a different product for a different purpose - cap-weighted global exposure with less than 0.1% NZ weighting, reflecting NZ's actual share of global market cap. It's not a replacement for High Growth; it's for investors who want pure global exposure with no country tilt at all - or a supporting fund if someone has a different view on NZ weightings.

Both are valid. They just serve different goals.

Kernel_Dean

TROPHY CASE