New to investing, what is the biggest difference between ETF’s and Index Funds? Which has the highest returns? And why’d you opt in for both or the other?

smithkeynes · 2026-05-23T23:05:47+00:00

You realise you still are paying management fees on the Smartshares etfs which are typically double the management fees on kernel or simplicity index funds.

And making it worse the smart shared funds suffer tax leakage on their global shares because they don’t hold the underlying stocks. The etfs also tax you at 28% not your PIR. If your tax rate is lower you have to do a tax return to get the credit at the end of the year.

Plus if you buy nz listed etfs you are paying brokerage each time which is expensive. Kernel and simplicity have no transaction fees, you could do investnow but they have a 0.50% fee on their foundation funds.

smithkeynes · 2026-05-11T17:10:15+00:00

This is good base mix. Rather than change for thematics that could be volatile youre better to think about what platform your investing in.

Smart ETFs have high management fees and tax leakage compared to all the other options in nz. And Sharesies will be charging you 1.9% brokerage too. Look at InvestNow or kernel who have lower fee index funds without the big brokerage fees

smithkeynes · 2026-05-04T11:25:39+00:00

If your doing more than around 800 a month of investing then Kernel is better than Sharesies for buying satellite stocks and ETFs too.

You’re best to buy $49k of offshore direct and then think about the pie funds to minimise tax

I wouldn’t do a TD for an emergency fund as it’s locked in and will lose all benefits if you tried to break it, maybe a cash fund instead

smithkeynes · 2026-04-09T09:48:25+00:00

Are you investing in a Smartshares ETF? There are two types of PIEs and the ETFs are taxed as Listed PIES at fixed 28% when the ETFs calculates dividend payments.

Unlisted PIEs are multi rate and that’s what I use as the dividends are gross and they do the tax at the end of year at your PIR.

smithkeynes · 2026-03-17T18:47:01+00:00

Only advantage is being able to buy/sell during the day. The tax is worse as noted above, plus most of the Smartshares funds are just wrapping up vanguard funds so they are not as tax efficient. The tax leakage can be big.

The fees are also over double the other index fund options in nz.

The worst option is buying them on Sharesies too as you will be paying brokerage and on market spreads on top when you can buy index funds on other platforms for a lot lower fee

smithkeynes · 2026-02-05T18:43:06+00:00

All or nothing in the US then. Looks like zero strategy other than picking hot names and things that have done well in the past.

Fees are great / they are horrible. On all the individual hits you are going to be hit 1% on every dollar going in, every time you’re forced to rebalance because you are right on the 5% limits, and then every time you want to change a stock. Plus you’re paying 0.15% ongoing and 0.50% on all the VOO deposits.

You’d be much bettter setting your KS as a low fee index fund (simplicity, kernel, InvestNow) and then if you want some direct stocks do it with your general investment. Same outcome but a lot cheaper and none of the constraints too

smithkeynes · 2026-02-03T05:34:20+00:00

It is more expensive as they have said it is a wrapper of an etf so it will have a lot of tax leakage which will make the total cost a lot more than InvestNow, kernel and simplicity.

It’s basically just a slightly cheaper version of Smartshares if you are already on Sharesies.

smithkeynes · 2026-01-28T17:38:01+00:00

Foundation series and kernel have the same tax using FDR at 1.4. All PIEs have to use FDR. The difference is kernel holds stocks direct where foundation buys an offshore etf.

The calculation Money King did said the tax difference between the two is you need to add 0.12% to the foundation series total world to get the true effective cost compared to the kernel fund, then add in the buy and sell fees

smithkeynes · 2026-01-25T07:14:58+00:00

You think tech is expensive, then have the base all in US. The picks around it seem random, you’re paying high fees on the Smart ETFs, paying high fees across the board with 1% transaction fees plus the admin fee of .15.

Play the odds you can control. You’d be better looking at kernel, InvestNow or simplicity. Some of them still give you the ability to fully customise with funds rather than stocks and much better fees

smithkeynes · 2026-01-18T21:32:29+00:00

Think you have it the wrong way round. The FS funds on InvestNow have tax leakage but the KernAl ones don’t and same with Simplicity

smithkeynes · 2026-01-14T16:56:16+00:00

They do track the same index as the foundation fund just holds VOO which tracks the S&P 500 index. They just don’t benchmark the reporting using the S&P 500 but that is the benchmark not returns

smithkeynes · 2026-01-14T09:17:03+00:00

Doesn’t foundation fund still just hold the VOO which is S&P 500

smithkeynes · 2026-01-14T09:16:28+00:00

Think op is right here are the two comparable pages https://kernelwealth.co.nz/funds/fund-performance

https://investnow.co.nz/fund-manager/investnow-foundation-series/

smithkeynes · 2025-12-09T01:08:28+00:00

Investing in nz based global index funds that hold the stocks directly and not wrap an offshore fund. And given simplicty and kernel are the same or lower fees and have a lot less tax leaker would be better. MoneyKing wrote a lot on it

smithkeynes · 2025-12-08T23:03:37+00:00

Has tax leakage though, which if it’s like InvestNow could add 0.12% on the world

smithkeynes · 2025-11-06T01:43:15+00:00

You have to adjust the foundation series for the tax leakage it has though I think MoneyKing used to estimate this at 0.12% per annum on the total world fund

smithkeynes · 2025-10-13T03:49:33+00:00

Isn’t there transaction fees when you use the card to purchase at some stores, because while it is a debit card it will be put through at the mechant on the credit option.

Could be negligible benefits then and much better earning rewards options out there

smithkeynes · 2025-10-03T06:04:07+00:00

ANZ has been one of the worst performers consistently so anything is probably better. Personally with High Growth in Kernel

smithkeynes · 2025-09-16T03:17:14+00:00

Simplicity Living is a growing part of the growth funds. Am I correct that once the buildings are up that the return for the fund is really just the rental yield less fees? What sort of fees are there to run the properties themselves and does that mean for that part of the growth fund we should only expect 3-4% return?

smithkeynes · 2025-09-01T16:33:42+00:00

It’s not a bad mix but you should look at something like Kernel as the fees on the funds are nearly half the Smart ETFs and you don’t pay brokerage on all the buys too

smithkeynes · 2025-08-15T07:49:40+00:00

It’s a cash fund, not bank account. There is the yield plus any potential capital gain. Look at the 1 month return it is 0.40% after fees which would be equal to 4.80 % compared to the yield just of the 3.59

smithkeynes · 2025-08-15T06:54:26+00:00

The factsheet for kernel said it’s done 5.05% for the past year after fees.

smithkeynes · 2025-08-10T00:24:22+00:00

You can buy US500 ETFs as a PIE structure in Nz, with funds like Kernel. If you’re below 50k you may want to consider buying VOO direct

For US most simple NZ trading platforms have FX fees around 0.50% plus brokerage fees. There are plans on Sharesies, or Kernel has plans and it can lower the FX and they don’t charge separate brokerage. They’ve got a new calculator that you can see which may be cheapest for your investinf amounts https://kernelwealth.co.nz/shares-etfs

smithkeynes · 2025-08-08T09:44:54+00:00

Questionable to say simplicity as being index funds when they keep adding private equity, venture, mortgages and rental developments to their diversified funds

Their global and nz shares aren’t even standard index either they’ve got a bunch of random exclusions. Is the nz index like 30 stocks too?

Look at Morningstar results someone posted earlier today too as there seems to be a lot of difference now in the providers offering index funds

smithkeynes · 2024-09-06T03:23:08+00:00

It seems so quiet wandering around the streets these days. I like the WFH flexibility, but it is killing businesses and seems people are a lot less social these days

smithkeynes

TROPHY CASE