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ETF's
Hi everyone
I'm wondering whether anyone has experience investing in ETF's listed on the NZX?
I've just had a quick look at FNZ (NZX50) and USF (S&P500) and they don't seems to have much liquidity. Does anyone have any alternatives for investing in an index?
Cheers,
C
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Originally Posted by Corporate
Hi everyone
I'm wondering whether anyone has experience investing in ETF's listed on the NZX?
I've just had a quick look at FNZ (NZX50) and USF (S&P500) and they don't seems to have much liquidity. Does anyone have any alternatives for investing in an index?
Cheers,
C
Hey Corporate
You could invest in all the NZX ETFs through SuperLife's managed funds - https://superlife.co.nz/investments/investment-options
Fees are similar & you can exit at the current unit price (liquidity shouldn't be an issue). However, I use them with a long term investment timeframe while dollar-cost averaging along the way...
If you're looking to trade, these instruments may not be suited.. you could look to the ASX? They'll probably have more depth & options..
Just a few ideas..
Cheers
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Originally Posted by huxley
Hey Corporate
You could invest in all the NZX ETFs through SuperLife's managed funds - https://superlife.co.nz/investments/investment-options
Fees are similar & you can exit at the current unit price (liquidity shouldn't be an issue). However, I use them with a long term investment timeframe while dollar-cost averaging along the way...
If you're looking to trade, these instruments may not be suited.. you could look to the ASX? They'll probably have more depth & options..
Just a few ideas..
Cheers
I was looking at getting some NZX ETFs through Smartshare but to exit them it sounded like you had to sell them yourself on the NZX?? I may well be wrong in thinking that, maybe you can exit them through Smartshares at the current unit price just like you describe for SuperLife?? I will look into Superlife options thanks
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You're correct. If you hold the ETF through Smartshares you'll need to sell them on market and pay brokerage. The SuperLife funds pool investor's $ and invest in the underlying ETFs - as a result they'll have a small allocation in cash as new funds are either invested or withdrawn. You'll want to check out the fund management fee. Oh, and you'll probably notice the whole thing is owned by and run by the NZX limited...
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Perhaps if you used all three of the NZ ETF's you would get enough liquidity. FNZ (Top Fifty) ; TNZ (Top 10) and MDZ (Mid Cap) are all thin as you say but combined may satisfy some situations. They seem to track their NTA closely enough. I suspect that there is an informal market maker so viewing the turnover may not be the full picture with regards to liquidity. see clause 19 in the Non-Standard designation waiver for these ETF listings.
I havent had any experience with these particular ETF's but I have queried the providers on a few specific points in the past, and do appreciate you raising them as an indexing option.
I wonder how could one test the liquidity without wasting money on transaction costs. I will have a look at the depth over the next week and comment further later.
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This may help, then again it may not & apologies for the layout
The approx average daily turnover for the last N trading days :
Code 16 day 64 day 256 day
FNZ $114,136 $209,783 $233,357
MDZ $39,081 $69,211 $94,909
TNZ $46,155 $83,699 $92,852
Turnover varies widely from day to day and the above will include off-market transfers.
Best Wishes
Paper Tiger
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Thanks all
This is for long term investment so I will check out Superlife
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Bids
Quantity No. Price
684 1 396
500 1 394.8
45,000 1 394.1
100,000 1 393.6
Asks
Price No. Quantity
397.1 1 45,000
397.5 1 1,000
397.6 1 100,000
The above are the quotes for MDZ at present. As I understand it the 100,000 and 45,000 buy bid and sell offer are in fact the NZX. This is applicable for all their ETF's although for different quantities. They adjust up and down with the NTA. If you sell into their bid then in a short period of time they will adjust the bid quantity back up to what it was. This, to me, gives enough liquidity but you have to accept their bid.
Last edited by 777; 23-01-2017 at 09:42 AM.
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It all depends
Originally Posted by Corporate
Hi everyone
I'm wondering whether anyone has experience investing in ETF's listed on the NZX?
I've just had a quick look at FNZ (NZX50) and USF (S&P500) and they don't seems to have much liquidity. Does anyone have any alternatives for investing in an index?
Cheers,
C
Cheers Corporate
IMHO It all depends eg on your time frame, objectives, and what others eg. world markets, FX, Trump, et al are doing while you are investing / invested.
My experience for what it is worth ...
When the new range of ETF came out I expected to be involved but in the event am not. NZX seemed to take many years to work through to any decision on a more extensive range of ETF.
The thing for me is the very small NZX volumes = no effective market, as many days no trades in some of the ETF.
I get the SuperLife option that the last traded price applies, however it seems to me that supply and demand sets the price and as there is often no demand you dont have price action impetus in your favour.
Time gone by I invested in MZY on the NZX. At the time I was well satisfied***.
*** I found these passive markets very good when the market is in a rising uptrend but no place to be on a falling market as the investment is passive with the index.
Many will find it hard to hold on to an investment when prices start to fall rapidly.
To get over the very thin liquidity that I found (almost no market at all) of ETF on NZX,
I also invested in SPDR and IShares on the ASX
STW SPDR ASX 200
IHK Ishares Hong Kong
ISG Ishares Singapore
My experience with the ASX ones was:
XXX as above for MZY
Plus
High brokerage fees and FX variations (eg NZD AUD and and SGD) plus the frequent and rapid up and down changes in international outlooks and markets post GFC resulted in poor returns relative to high risk at the time IMHO.
Result was I exited with minor profits.
Over to each of us to decide based on our view of situation at the time of investment ...
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Originally Posted by Toulouse - Luzern
Cheers Corporate
IMHO It all depends eg on your time frame, objectives, and what others eg. world markets, FX, Trump, et al are doing while you are investing / invested.
My experience for what it is worth ...
When the new range of ETF came out I expected to be involved but in the event am not. NZX seemed to take many years to work through to any decision on a more extensive range of ETF.
The thing for me is the very small NZX volumes = no effective market, as many days no trades in some of the ETF.
I get the SuperLife option that the last traded price applies, however it seems to me that supply and demand sets the price and as there is often no demand you dont have price action impetus in your favour.
Time gone by I invested in MZY on the NZX. At the time I was well satisfied***.
*** I found these passive markets very good when the market is in a rising uptrend but no place to be on a falling market as the investment is passive with the index.
Many will find it hard to hold on to an investment when prices start to fall rapidly.
To get over the very thin liquidity that I found (almost no market at all) of ETF on NZX,
I also invested in SPDR and IShares on the ASX
STW SPDR ASX 200
IHK Ishares Hong Kong
ISG Ishares Singapore
My experience with the ASX ones was:
XXX as above for MZY
Plus
High brokerage fees and FX variations (eg NZD AUD and and SGD) plus the frequent and rapid up and down changes in international outlooks and markets post GFC resulted in poor returns relative to high risk at the time IMHO.
Result was I exited with minor profits.
Over to each of us to decide based on our view of situation at the time of investment ...
Thanks for sharing that, very helpful, cheers
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