ETFs and passive funds for beginners...

[MJA]

I'm an absolute beginner in the world of investing, and I'm thinking that a passive fund/ ETF would be a good idea to start with. Any suggestions? I've had a look at the Smartshares ETFs. I'd also consider an actively managed fund but I'm not sure how to choose one. I have about $5,000 to invest.

[Okebw]

I'm an absolute beginner in the world of investing, and I'm thinking that a passive fund/ ETF would be a good idea to start with. Any suggestions? I've had a look at the Smartshares ETFs. I'd also consider an actively managed fund but I'm not sure how to choose one. I have about $5,000 to invest.

The smartshare EFTS are pretty pricey considering how little effort is actually put in by the managers.
Personally I prefer the ASX listed vanguard funds for diversifiction. You get a lot more choice as well as a much smaller management fee

[Harvey Specter]

For $5k, might not be worth the effort to look at the cheaper overseas EFTs.

My recommendation:
- buy one of the smart shares.
- set up a monthly deposit (how many listed shares can you do that with. One of their best features imho)
- start monitoring the market
- as your investment grows, consider if you want to take an active or passive approach. If still passive, consider some of the overseas funds (either active or passive). (Passive doesn't mean you do nothing, you still need to consider the best fund to be in.)

[MJA]

For $5k, might not be worth the effort to look at the cheaper overseas EFTs.

My recommendation:
- buy one of the smart shares.
- set up a monthly deposit (how many listed shares can you do that with. One of their best features imho)
- start monitoring the market
- as your investment grows, consider if you want to take an active or passive approach. If still passive, consider some of the overseas funds (either active or passive). (Passive doesn't mean you do nothing, you still need to consider the best fund to be in.)

Thanks for your response Harvey. Can you tell me why you think it's not worth the effort to look overseas with $5k, and at what point it would be worthwhile?

[MJA]

The smartshare EFTS are pretty pricey considering how little effort is actually put in by the managers.
Personally I prefer the ASX listed vanguard funds for diversifiction. You get a lot more choice as well as a much smaller management fee

Thanks Okebw. I have done some reading about these funds, yes the management fees are considerably lower. Sorry for my ignorance - what is the best way to invest in these from NZ? are there any tax implications? Thanks

[Harvey Specter]

Brokerage will be higher and complexity of setting up overseas broker from outside of country. Depends how much you will be investing going forward though - if $4k a month, do it.

Plus forex movements

[MJA]

Brokerage will be higher and complexity of setting up overseas broker from outside of country. Depends how much you will be investing going forward though - if $4k a month, do it.

Plus forex movements

Ok, thanks. What about other index funds in NZ, there doesn't seem to be too much information or comment on these, ASB Easygrowth fund etc. Is Smartshares the best option?

[Jay]

You should be able to purchase Aus based EFT's thru your NZ online broker - ASB and ANZ (Direct Broking) have recently allowed these now.

[MJA]

You should be able to purchase Aus based EFT's thru your NZ online broker - ASB and ANZ (Direct Broking) have recently allowed these now.

Thanks Jay. I've had a look at the ANZ Direct Broking on the website, the only ETFs seem to be Smartshares funds - do you know of any others? Thanks

[blackcap]

Thanks Jay. I've had a look at the ANZ Direct Broking on the website, the only ETFs seem to be Smartshares funds - do you know of any others? Thanks

Try this link for ASX based ETF's which you will be able to purchase via the ANZ direct broking website...

http://www.asx.com.au/products/etf/managed-funds-etp-product-list.htm

Click on the ETP link for their exchange traded funds. Cheers.

[MJA]

OK, found it, I've had a bit more of a thorough look, thanks for your help blackcap.