Advice on smartshares

[Benny1]

Hi, Longtime reader 2nd time poster on Sharetrader!

I have been quietly investing in shares for a couple of years and slowly building a portfolio containing AIR,THL,ARV,EVO.PGW,HBL and BLT (Hmm not quite sure about that one!) also have a very small parcel of ATL, hoping they can forge the same sort of success that THL has had over the past couple of years. I plan to continue with the (full support of a very loving and understanding wife) to grow these holdings and more in the future. (any thoughts on what I hold would be gladly appreciated too:))

We also have a small but growing each month FNZ smartshares fund, and have thought about adding more of these,possibly a US fund and maybe an Aussie one. We feel they are a good saving discipline and they complement our super schemes.

The one thing I do wonder about though is the liquidity of these smartshares. What happens in 20 years time when I want to sell some of these ?
Will there actually be a demand for these shares or will everyone be accumulating them monthly like I do at the moment without having to purchase shares straight from the market?
Would appreciate any thoughts on this and hope this is the 2nd of many posts from me!
Cheers

[blackcap]

Hi, Longtime reader 2nd time poster on Sharetrader!

I have been quietly investing in shares for a couple of years and slowly building a portfolio containing AIR,THL,ARV,EVO.PGW,HBL and BLT (Hmm not quite sure about that one!) also have a very small parcel of ATL, hoping they can forge the same sort of success that THL has had over the past couple of years. I plan to continue with the (full support of a very loving and understanding wife) to grow these holdings and more in the future. (any thoughts on what I hold would be gladly appreciated too:))

We also have a small but growing each month FNZ smartshares fund, and have thought about adding more of these,possibly a US fund and maybe an Aussie one. We feel they are a good saving discipline and thThey complement our super schemes.

The one thing I do wonder about though is the liquidity of these smartshares. What happens in 20 years time when I want to sell some of these ?
Will there actually be a demand for these shares or will everyone be accumulating them monthly like I do at the moment without having to purchase shares straight from the market?
Would appreciate any thoughts on this and hope this is the 2nd of many posts from me!
Cheers
The NZX which own Smartshares also provide a market maker... have a look at depth on broking sites. So there is no problem exiting these investments. I think (not 100% sure) that if you have a very large parcel (over 500,000) then they can actually redeem a basket of these units so you would get "real market value".
I have some smartshares too, actually FNZ is my Kiwisaver so that keeps the regular savings ticking along nicely.

[icyfire]

Hi, Longtime reader 2nd time poster on Sharetrader!

The one thing I do wonder about though is the liquidity of these smartshares. What happens in 20 years time when I want to sell some of these ?
Will there actually be a demand for these shares or will everyone be accumulating them monthly like I do at the moment without having to purchase shares straight from the market?
Would appreciate any thoughts on this and hope this is the 2nd of many posts from me!
CheersWhile some Smartshares investors including myself are currently making monthly contributions there will come a time when these investors will need/want to sell their shares on the market. If you are using ANZ Securities you can create a watchlist which enables you to see the daily trades for each fund and you will notice that there is plenty of trades occurring daily.
I've personally invested in FNZ, MDZ and US 500.
Would I invest in just one or a few companies or invest in all the underlying companies of a Smartshares ETF? It's a no-brainer. I believe that passive investment is the future and it will only continue to grow in NZ.

[Benny1]

Thanks for your replys blackcap and icyfire.
I haven't actually heard of market makers before! I'll do a bit of research into them...
Like you icyfire I think etf's will continue to grow in NZ and as we can contribute hopefully for the next 15-20 years I think they are a good nest-egg for later years.

[blackcap]

Thanks for your replys blackcap and icyfire.
I haven't actually heard of market makers before! I'll do a bit of research into them...
Like you icyfire I think etf's will continue to grow in NZ and as we can contribute hopefully for the next 15-20 years I think they are a good nest-egg for later years.

HI Benny1, marketmakers are contracted by the NZX or whoever is providing the security to ensure that there is an active buyer and seller in the market so that liquidity exists so ppl are comfortable holding the security. Their reward is that they can make money on the spread.

[FIsaver]

While I agree that ETF's are a no brainer in that they are low cost and you can be well diversified. Has anyone thought about future returns? With more and more people pumping regularly into a set number of companies e.g. the S&P500, I wonder if future returns will be less than historic.

[blackcap]

While I agree that ETF's are a no brainer in that they are low cost and you can be well diversified. Has anyone thought about future returns? With more and more people pumping regularly into a set number of companies e.g. the S&P500, I wonder if future returns will be less than historic.

Interesting question. I do wonder though what this premise is based on? Not because companies are going to be making less money than in the past because you allude to more people pumping regularly eg. However if ppl were not pumping regularly into ETF's surely they would be pumping money into other funds and directly into shares themselves that are also part of the S&P 500 and thus not actually change anything? Thats my take on it but I am happy to hear other thoughts. I thought the NZ market has been distorted slightly the last 10 years with the advent of Kiwisaver (ie a lot more funds in than out in its initial stages) until someone pointed out that the amount of $ into NZ equities from Kiwisaver is not as large as I thought it might have been.

[Pipi]

I love the idea of Smartshares, definitely diverse, but my big concern is the small returns they have. A lot only give 5%. Which takes a long time to grow your money. Is it not much better investing in a company that pays 10% return? Just putting my thoughts out there, be interested to hear others opinions on this.

[icyfire]

I love the idea of Smartshares, definitely diverse, but my big concern is the small returns they have. A lot only give 5%. Which takes a long time to grow your money. Is it not much better investing in a company that pays 10% return? Just putting my thoughts out there, be interested to hear others opinions on this.
Let's take for example the Smartshares fund FNZ (http://smartshares.co.nz/types-of-funds/smartlarge/fnz) which generated an Investor Return of 6.51% over the last year and on of top of that capital gain it also pays a Gross Dividend of 5.40%.
Which company are you referring to that pays 10% return? And have you taken into account the high risk that comes with that 10% return?

[blackcap]

Thanks for your replys blackcap and icyfire.
I haven't actually heard of market makers before! I'll do a bit of research into them...
Like you icyfire I think etf's will continue to grow in NZ and as we can contribute hopefully for the next 15-20 years I think they are a good nest-egg for later years.

Hey Benny1, if you look at the depth of FNZ as at 11.28AM you will see on the bid a buyer for 75,000 shares at 2.21 and a buyer for 100,000 shares at 220.5.
On the sell side you see a seller of 75,000 shares at 222.2 and a seller of 100,000 shares at 222.7.
These are your market makers. No problems with liquidity ever.

[Benny1]

Hey Benny1, if you look at the depth of FNZ as at 11.28AM you will see on the bid a buyer for 75,000 shares at 2.21 and a buyer for 100,000 shares at 220.5.
On the sell side you see a seller of 75,000 shares at 222.2 and a seller of 100,000 shares at 222.7.
These are your market makers. No problems with liquidity ever.

Cool...thanks for that blackap...i didn't think about the marketmaker making their profit from the spread,makes sense now.I take it that they are normally brokage firms that act as the marketmaker?

[blackcap]

Cool...thanks for that blackap...i didn't think about the marketmaker making their profit from the spread,makes sense now.I take it that they are normally brokage firms that act as the marketmaker?

Yes I think it is...don't quote me on that but its normally an institution, be it a broker or not. It could even be Smartshares themselves but I did ask once (give them a call on the 0800 number) and they said they outsourced it.

[huxley]

While I agree that ETF's are a no brainer in that they are low cost and you can be well diversified. Has anyone thought about future returns? With more and more people pumping regularly into a set number of companies e.g. the S&P500, I wonder if future returns will be less than historic.

There's a lot of interesting research from the behavioural economics field looking into this issue. Apparently you have to consider the environment you're investing into and act accordingly.

So.. currently if most of the global capital is actively managed (and you assume assets are correctly priced) you can safely free ride off the collective research through your low cost ETF.

If however you wake up in an environment where most of the global capital was invested passively you might want to start paying someone to research the market and locate opportunities.

For example a passive fund would just allocate funds based on the underlying index, so if Enron is 2% of the market 2% of the capital would be invested in Enron. Basically no one is checking to see if any of the companies are a massive fraud!

[thestg]

I see FNZ is listed in ANZ Securities trading site & if I click on BUY I have the option to purchase.

My question is, if I was to buy via ANZ Securities how do they collect the fund management fees from me? Do I get a billed for the entry fee as well as paying brokerage?

[blackcap]

I see FNZ is listed in ANZ Securities trading site & if I click on BUY I have the option to purchase.

My question is, if I was to buy via ANZ Securities how do they collect the fund management fees from me? Do I get a billed for the entry fee as well as paying brokerage?

There is no entry fee if you purchase an ETF online. Just the brokerage. (Which one could argue is a substitute for an entry fee). Do FNZ have an entry fee if you buy units through the NZX? I thought an application was totally fee less last I checked? So its probably cheaper buying through the provider but you have to pay now and wait till they allocate your stock which I believe is done once a month.

[thestg]

Thanks blackcap

[Pipi]

Let's take for example the Smartshares fund FNZ (http://smartshares.co.nz/types-of-funds/smartlarge/fnz) which generated an Investor Return of 6.51% over the last year and on of top of that capital gain it also pays a Gross Dividend of 5.40%.
Which company are you referring to that pays 10% return? And have you taken into account the high risk that comes with that 10% return?

Hi Icyfire, thanks for your reply. One that pops to mind is PGW, last year you could pick them up for .40, that would give you a 10% dividend and today they are .55. No I hadn't taken into the account the risk of investing in one company. Which yes is a risk, and I see the advantages of the smart shares to diversify to reduce this risk.

[Dean@Smartshares]

Hi from Dean at Smartshares,

It is great to see the level of knowledge on Smartshares ETFs in this forum. We thought it might be helpful to confirm a few of the comments for you and highlight the difference between buying units on market vs investing with Smartshares directly.

Buying on market
Your trade will occur on market at the time of your order and the price paid will depend on current supply and demand. Noting though that there is a market maker in place providing buy and sell prices for each Smartshares ETF at spreads around the NTA value. This is a third party market maker.
There will likely be a brokerage cost with the trade and this will be set by the broker you elect to use.

Buying direct from Smartshares
We pool applications on a monthly basis with all approved online applicants having their application amount direct debited on the 20th of the month.
Units will be issued on or about the last business day of the month at closing price.
The units will appear in your registry account on or about the 3rd business day of the following month.
Our application fees are as follows:
· Initial $30 fee for a new fund investment
· There are no application fees on any further investments into a fund you already hold units in, or for the regular savings plan function we offer. The regular savings plan allows you to invest in any ETF from as little as $50 a month with no transaction fees.

Management fees
There was also a question on how the management fees are paid. Management fees are the same regardless of whether you buy on market or via Smartshares directly.
Management fees for the funds are deducted on a daily basis and reflected within the NTA price. Therefore, there is no physical payment required from an investor as the unit values already reflect the reduction of the fees.
Ongoing management fees for the various funds can be found at: http://smartshares.co.nz/fund-investor-report

[Banksie]

Management fees
There was also a question on how the management fees are paid. Management fees are the same regardless of whether you buy on market or via Smartshares directly.
Management fees for the funds are deducted on a daily basis and reflected within the NTA price. Therefore, there is no physical payment required from an investor as the unit values already reflect the reduction of the fees.
Ongoing management fees for the various funds can be found at: http://smartshares.co.nz/fund-investor-report

This may be a dumb question, but how is the management fee calculated? For example the "Fund Fee" on FNZ is 0.5%. Is this .5% of total assets, growth?



Our application fees are as follows:
· Initial $30 fee for a new fund investment

Do you disclose this fee anywhere? I couldn't seem to find it. It certainly doesn't appear on your fees page http://smartshares.co.nz/benefits#lower-fees

[Dean@Smartshares]

Hi Banksie,


The management fee is calculated daily on the total asset value. For details of the fees, including the $30 application fee, please refer to section 5 on page 16 of our Product Disclosure Statement. (http://smartshares.co.nz/images/uploads/Product%20Disclosure%20Statement%20-%20Smartshares%20Exchange%20Traded%20Funds.pdf)

[Banksie]

Hi Banksie,


The management fee is calculated daily on the total asset value. For details of the fees, including the $30 application fee, please refer to section 5 on page 16 of our Product Disclosure Statement. (http://smartshares.co.nz/images/uploads/Product%20Disclosure%20Statement%20-%20Smartshares%20Exchange%20Traded%20Funds.pdf)

Thanks.

Lol - buried in the pdfs, right ;).

[blackcap]

Hi Banksie,


The management fee is calculated daily on the total asset value. For details of the fees, including the $30 application fee, please refer to section 5 on page 16 of our Product Disclosure Statement. (http://smartshares.co.nz/images/uploads/Product%20Disclosure%20Statement%20-%20Smartshares%20Exchange%20Traded%20Funds.pdf)

Hi Dean,

That is all good and well and I know where to find these things. But rather than try to hide your fees I think from a PR point of view and making things easier for your clients it would be better to just have these figures available in full frontal view so to speak. It pisses me off no end with companies that try and obfuscate or hide things trying to pull one over the customers. Real estate agents are just as bad not giving an indication on price (as an example), it means I have to call and ask and is just a waste of time.

[Dean@Smartshares]

Hi blackcap,

Thanks for your feedback, we take fee disclosure seriously as a low cost provider. We publish the management fees for the funds, which apply to all investors, across our website on each fund page and also on the funds summary page (http://smartshares.co.nz/fund-investor-report). It is important to remember that the fund application fee of $30 is only applicable to those who apply directly to Smartshares and only for the first investment in an ETF. It does not apply to those who buy units on market or who purchase additional units in a fund they already own. This is why it is disclosed in the PDS (which investors have to read before investing directly with Smartshares). It is not an attempt to hide the fee, purely to note it only applies in certain circumstances. Nonetheless, we do appreciate your opinion on this and we'll look at how we can update our online form to make sure this is as clear as possible.

[icyfire]

Hi from Dean at Smartshares,

It is great to see the level of knowledge on Smartshares ETFs in this forum. We thought it might be helpful to confirm a few of the comments for you and highlight the difference between buying units on market vs investing with Smartshares directly.

Hi Dean,

One reason that holds me (and other investors) back from investing even more into Smartshares is the lack of a Portfolio Dashboard tool which would enable all investors to quickly view the performance of their ETFs. Currently, I have no idea how well my ETFs are performing and always wonder: "What is the return on my investment? Should I increase my monthly contributions into this ETF? Am I putting money into a bottomless bucket every month (it surely feels like it at the moment)?, etc". Please don't tell me to use the LinkMarket website to gather this info because I don't have half an hour every time I need this info. I need to see the performance of my ETFs on a graph and not having to manually gather and put data into a spreadsheet or into some other external portfolio tool every month. Don't make your customers jump through hoops.
I'd love to be able to also quickly and easily amend the monthly contributions for each of my ETFs based on my monthly cash flow. Some months I can save more than in other months. Currently, I have to send an email to LinkMarket Services which is cumbersome and slow so I just don't bother.
I actually find it quite bizarre that Smartshares doesn't provide such tool. Please build a Portfolio Dashboard tool.

[blackcap]

Hi Dean,

One reason that holds me (and other investors) back from investing even more into Smartshares is the lack of a Portfolio Dashboard tool which would enable all investors to quickly view the performance of their ETFs. Currently, I have no idea how well my ETFs are performing and always wonder: "What is the return on my investment? Should I increase my monthly contributions into this ETF? Am I putting money into a bottomless bucket every month (it surely feels like it at the moment)?, etc". Please don't tell me to use the LinkMarket website to gather this info because I don't have half an hour every time I need this info. I need to see the performance of my ETFs on a graph and not having to manually gather and put data into a spreadsheet or into some other external portfolio tool every month. Don't make your customers jump through hoops.
I'd love to be able to also quickly and easily amend the monthly contributions for each of my ETFs based on my monthly cash flow. Some months I can save more than in other months. Currently, I have to send an email to LinkMarket Services which is cumbersome and slow so I just don't bother.
I actually find it quite bizarre that Smartshares doesn't provide such tool. Please build a Portfolio Dashboard tool.

Pretty much what he said. Make it more user friendly!! But be transparent as well. Be the good guys. You are not going or trying for alpha so have nothing to hide either. Yes your fees are a bit high by world index standards but that can be forgiven in a smallish market like NZ. By far the best product available at this point in the NZ market.

[huxley]

Why would you want to pay for this service though smartshares when you can access free reporting tools very easily (for example Sharesight)?? At the end of the day smartshares is offering a low cost etf solution...

[icyfire]

Why would you want to pay for this service though smartshares when you can access free reporting tools very easily (for example Sharesight)?? At the end of the day smartshares is offering a low cost etf solution...Sharesight is not a good tool when you do monthly contributions into several ETFs and I don't have the time to update Sharesight every month. Sharesight is probably a good tool for when investing in individual companies directly.

[FIsaver]

I just update sharesight every month - You're right it does take some time about 15mins a month, and all the ETF are there. I'd prefer at this stage to keep the fee's as low as possible.

You can also buy the underlying smartshare ETF's though superlife though their management fees I believe are slightly higher.

smartshare at 0.35% / superlife at 0.44%

[icyfire]

I just update sharesight every month - You're right it does take some time about 15mins a month, and all the ETF are there. I'd prefer at this stage to keep the fee's as low as possible.

You can also buy the underlying smartshare ETF's though superlife though their management fees I believe are slightly higher.

smartshare at 0.35% / superlife at 0.44%
I use ANZ Securities to buy the Smartshares. I don't know how many ETFs you are making contributions to every month but I have several. Even Simplicity Funds have a basic Portfolio Dashboard and their fees are just as low.

[WingingIt]

InvestNow now have access to 7 SmartShare funds,

Australia Top 20
Australia Mid Cap
NZ Top 50
NZ Mid Cap
Europe
US Top 500
Total World

[lawson]

Hi I'm resurrecting an old thread rather than starting a new one because my question relates to smartshares and I was also interested in any advice/thoughts anyone might have.

Smartshare have a NZ Dividend (DIV) ETF it usually has twice yearly distributions.(June & December)

They list the following companies as being the top 10 holdings

Contact Energy 10.32%
Meridian 9.5%
Spark 9.05%
Infratil 7.34%
Chorus 6.87%
Mercury 6.53%
Ebos 5.45%
Genesis 4.86&
Ryman 4.67%
Goodman Property Trust 4.33%

They have announced yesterday that they will not pay the second dividend for the year usually paid December. The notice said:

Smartshares Distribution – November 2020 Smartshares NZ Dividend ETF (DIV) pays semi-annual distributions, where available, based on income received during that distribution calculation period from the underlying securities.For the period 20 May 2020 to 18 November 2020, DIV has not received sufficient income to pay a distribution. It is expected DIV will pay the next distribution for the period ending 31 May 2021.

However, the top 10 holdings they list (that I detailed above and which represent approx 70% of the ETF) all paid their dividend. None of them missed. Ryman & GMT are a little down but Chrous and Ebos's dividends were a little up. How can there be nothing to distribute? What's the point of investing in a DIvidend ETF invested in underlying companies that did pay a dividend but then the ETF says it can't?

I was literally about to invest some money on behalf of my mother into DIV - as it seemed a diversified, low fee option and she just needs a range of income investments that will beat the bank and I thought this might be one to include but now I am really puzzled as to how this is working?

Does anyone have any thoughts or have any experience of being with smartshares?

Thanks

[Jay]

My question would then be what have they done /what are doing with the diviends they have received? - all profit for themselves?
You would think they may pay a reduced dividend which would be fair enough

[Norwest]

That is extremely underhanded... I bet they didn't cut their management fee though!

[arekaywhy]

Where was the notice about not paying dividend? I have checked their website and nothing. I am a holder of that ETF and no notice has been given to me.

[Chickens]

If lawson hadn't pointed it out, I certainly wouldn't have known.

There may be a less obscure way, but refer to https://www.nzx.com/companies/DIV/announcements;

Look at the announcement: DIV Distribution and Taxable Bonus Issue Notice (https://www.nzx.com/announcements/363734) ("Smartshares Limited is pleased to announce . . . . ")

At the bottom there's a link to DIV Distribution Letter (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/DIV/363734/335694.pdf) which states "For the period 20 May2020 to 18 November2020, DIV has not received sufficient income to pay a distribution."

I'm somewhat disappointed, and I don't think this decision is consistent with the intended spirit of the DIV smartshare.

[turbo]

Same. I wouldn't have known either if Lawson hadn't mentioned it. Had to go looking for it. Bit disappointing as the reason for investing in that ETF is for the dividends

[arekaywhy]

yeah, it's in the name...which is kind of important to those investing their hard earned into it.

You'd think this would be so frikken important that they would alert investors loudly, but no, which looks sneaky and furtive

VERY disappointed, especially given the underlying shares have paid out dividends

[Banksie]

Looks like they might have made a mistake.
"Smartshares Limited, the manager of the Smartshares Exchange Traded Funds, announces that some of the information in the 23 November 2020 announcement is incorrect. It will release an amended announcement later this morning."

https://www.nzx.com/companies/DIV/announcements

Thanks for bringing this up. I moved my SmartShares to InvestNow, because they are easier to manage and view through them. The downside is I don't seem to get the announcements. Something I need to follow up.

[Chickens]

Updated DIV distribution notice;

Amendment: DIV Distribution and Taxable Bonus Issue Notice (https://www.nzx.com/announcements/363875)

Roughly 2c divvy, ex-div date 01 Dec, payable 18 Dec 2020.

(what were they thinking, announcing no dividend for a "Dividend" fund. I bet that prompted a lot of "constructive feedback")

[arekaywhy]

yeah they penised that up badly

[lawson]

It's good they're paying it.

They left me a voicemail message this morning to say they'd issue a correction and pay a dividend but I was in meetings and just got it.

I would like to think it's just a mistake although they should be more professional than to put out a notice to advise they won't pay people in error. Still I hope that's what happened and that they didn't back down due to "constructive feedback" as I don't like to deal with companies that only do the right thing when pressured.

So now I have to decide whether to invest or not. Thanks all for the replies.

[xlinknz]

Is there any (NZ) tax advantage for say investing in an ETF such as FNZ (top 50 NZX) and a managed investment fund e.g. Simplicity NZ Share which is also based on the NZX50?

[Jerry]

New Question: I wanted some Aussie stocks but haven't a clue about their exchange so I looked into ASD Smartshares Aus Divs. Present Shareprice $1.64 and divs 5.23%. Looks OK until one looks at the EPS... -37.4cents! Wott! How are they staying afloat?
Then OK, had a look at other Smartshares... ASF, Aussie Financials. EPS - $1.67
ASP Aus Property EPS - $1.50
Could someone please explain the logic of these investments?

[Snow Leopard]

New Question: I wanted some Aussie stocks but haven't a clue about their exchange so I looked into ASD Smartshares Aus Divs. Present Shareprice $1.64 and divs 5.23%. Looks OK until one looks at the EPS... -37.4cents! Wott! How are they staying afloat?
Then OK, had a look at other Smartshares... ASF, Aussie Financials. EPS - $1.67
ASP Aus Property EPS - $1.50
Could someone please explain the logic of these investments?

You need to be aware that the earnings of these investments is the change in market value of their holdings plus the dividends received from said holdings.
Their financial year ends on 31 March, every year.

So on 31-Mar-2020 the Oz market was just beginning to recover from the great covid sell-off, and thus these funds NTA values were deeply down on the prior year.

Come 31-Mar-2021 it is likely, though not certain, that the earnings will be similarly spectacularly positive.


The logic is the usual logic of investing in any ETF.

[Jerry]

Thanks. Snow Leopard. So although ASD is Aussie Dividends Smartshares, one is investing in companies giving good dividends, but relying on their growth characteristics for earnings? Not quite what I had envisaged.

[Snow Leopard]

Thanks. Snow Leopard. So although ASD is Aussie Dividends Smartshares, one is investing in companies giving good dividends, but relying on their growth characteristics for earnings? Not quite what I had envisaged.

No. Where did you get that idea from?

[Ferg]

I noticed previous posters have mentioned the US500 (USF) fund. Seriously do NOT buy into it. Smartshares invests 100% of the proceeds into a Vanguard fund. So Vanguard charge their fee and Smartshares charge 0.5% or thereabouts for investing 100% of the funds into another fund. The cheek of it! Same goes for USG, LIV and a number of other large platform funds. I think it is an absolute rort to have two sets of funds both charging fees.

That said, Smartshares actively invest in some stocks, rather than funds, like ASF, ASR etc. I highly recommend checking to see what they invest in before committing any funds. This information is available per the regular releases for the various funds on the NZX website.

Secondly, I have stopped buying Smartshares directly now. I now invest via the likes of Sharesies. Why?

Link Market Services is useless. It takes days to get announcements and updates when it really should be instantaneous. It feels like they are an analogue business in a digital world. I actively avoid investing directly into any organisation that uses Link.
I have no idea what Link and/or Smartshares does with the roundings but I highly doubt I benefit from any roundings given units are always issued in whole numbers and there is no change from the investment. Or if there is change, it is not transparent. (NB: this is on the basis that you invest set dollars, not buying a set number of units such that a unit that costs say $12 with an investment of say $200 results in a missing $8, or in this case 4%).
Smartshares takes the money on the 20th, goodness knows what happens for 10 or 11 days but then they invest it on the last day of the month. That is really poor form in today's digital world. And then it takes at least 3 days to get anything from Link. If I spend money today, I want to know at the end of the day what I have bought - not 14 days later.
Lastly, investing the funds all at the same time is IMO a not very smart tactic. I would rather buy on market and take the ups and downs of the intra month movements.


So in summary, the benefit of buying Smartshares via the likes of Sharesies and not directly:

Partial unit allocations means no money is lost in the roundings
Instant use of the funds and notification of what I have bought
The ability to buy in, what I think are, price troughs.

[justakiwi]

I disagree. The reality is that for some of us this is the only affordable way to buy into Vanguard funds. Doing it via Sharesies - via Smartshares - makes it doable for people like me.


I noticed previous posters have mentioned the US500 (USF) fund. Seriously do NOT buy into it. Smartshares invests 100% of the proceeds into a Vanguard fund. So Vanguard charge their fee and Smartshares charge 0.5% or thereabouts for investing 100% of the funds into another fund. The cheek of it! Same goes for USG, LIV and a number of other large platform funds. I think it is an absolute rort to have two sets of funds both charging fees.

[k14]

I disagree. The reality is that for some of us this is the only affordable way to buy into Vanguard funds. Doing it via Sharesies - via Smartshares - makes it doable for people like me.
Have you seen investnow? This has some vanguard funds that you can buy into with reasonably low fees.

[turnip]

I disagree. The reality is that for some of us this is the only affordable way to buy into Vanguard funds. Doing it via Sharesies - via Smartshares - makes it doable for people like me.

You can buy the Vanguard ETFs directly in Sharesies now.

(Edit: There might still be reasons to buy the Smartshares equivilent rather than the Vanguard original though, such as no brokerage and no currency exchange fees for Smartshares, and maybe some tax differences.)

[SBQ]

I disagree. The reality is that for some of us this is the only affordable way to buy into Vanguard funds. Doing it via Sharesies - via Smartshares - makes it doable for people like me.

To add, there's a lot more to just owning the Vanguard ETF through a NZ fund. There's also compliance FMA regulations that the NZ Smartshares (and others) have to comply with. Issues like FIF will kick in if over $50K in total foreign balance adds more paperwork so the client has the correct totals to report for FIF.