Hatch investment service?

[Jonboyz]

Saw this on the news today and checked out their website (owned by same owners of Kiwibank). It's a shame they don't disclose what products they have access to unless you register.
https://www.stuff.co.nz/business/money/107323211/kiwi-wealth-unveils-fintech-startup-hatch-to-help-kiwi-investors-buy-us-companies (http://https://www.stuff.co.nz/business/money/107323211/kiwi-wealth-unveils-fintech-startup-hatch-to-help-kiwi-investors-buy-us-companies)

Website: https://www.hatchinvest.nz/

Here are their fees:


Brokerage fees:

When you buy or sell shares or ETFs from your Hatch account, you pay a brokerage fee that we split with our US broking partner, Drive Wealth:


To buy or sell a fraction of a share: $3 USD
To buy or sell one or more shares: $0.02 USD a share
There's an $8 USD minimum fee, so up until you buy 400 shares, you'll be paying a flat rate of $8 USD on every order.

Exchange fees:

An 0.8%* fee is included in the exchange rate you see in Hatch. Our fee is lower than what most banks charge (which is usually about 1%). We split this fee with our FX partner World First. It works like this:


Base exchange rate (Interbank rate): 1 NZD = 0.67 USD
Hatch rate: 1 NZD = 0.662 USD (0.67 - 0.008)
Bank rate (estimated): 1 NZD = 0.660 USD (0.67 - 0.01)


Brokerage fees seem pretty good. If I read this right, you could buy, for instance, 399 Amazon.com shares (worth >$200,000) and still only have to pay $8 USD in brokerage fee?!

One disadvantage i see here is that they do not provide a foreign exchange account, forcing you to accept the current day's exchange fees immediately on transaction.

[Pipi]

Has a lot of +'s great idea.

[Lego_Man]

One disadvantage i see here is that they do not provide a foreign exchange account, forcing you to accept the current day's exchange fees immediately on transaction.


You could synthetically achieve a similar outcome by buying a US Treasury ETF as a placeholder.

[voltage]

Impressed, simple, clever and this is what has been lacking for US direct share and ETF investors. No custodial fees.

[Pipi]

I just signed up, waiting to be verified. How exciting. But my gosh with 3242 options to invest, how do you choose!!

[Jonboyz]

Good thing about US stocks are that their is a lot of information and analysis of each company. Much more than NZ or AU.

I hope hatch brings in a foreign exchange holding account so that when you sell US stocks, that money goes into that account in USD, which then allows you to then make an exchange back to NZD when the FX rates are best. USD/NZD not good at the moment.

I have half of my total portfolio in US stocks through ASB, which does provide a FX holding account. So, until Hatch provides the same I don't think I'll use them (will register an account to look at though).

[Mickey]

One disadvantage i see here is that they do not provide a foreign exchange account, forcing you to accept the current day's exchange fees immediately on transaction.

Looks like the Hatch account is a foreign exchange account if the chat session I had on their site is anything to go by - see below:


Hi - do dividends and proceeds from sales remain in US Dollars in the Hatch Account or are they converted to NZ Dollars on whatever the exchange rate is at the time?



Hi there Michael,
The dividends are paid back into your Hatch account in USD and will stay there until you choose to withdraw them (back into NZD).
I hope this helps!
Thanks,
Kristen


Yes, I think so. So basically, say I deposit $NZD20,000, which converts to USD at whatever rate is applicable - my Hatch account is in USD. Any dividends or sales go into that account as USD and I can continue to purchase stocks using those USD until such time as I need to top up again



Exactly!! You've got it.
Kristen

[dobby41]

Looks like the Hatch account is a foreign exchange account if the chat session I had on their site is anything to go by - see below:

Very hard to read colour but good news - stays in the same currency just the way I like it.

[Jonboyz]

That makes sense for an exclusive-US platform. I would wait a while until the USD/NZD rate improves before using it though (or if/when there is a big correction/crash and lots of bargains!).

[huxley]

Does anyone know what would happen to your investments if the Hatch platform no longer existed ?

[huxley]

Just answering my own question: https://www.kiwiwealth.co.nz/about-the-custodian

[blackcap]

Just answering my own question: https://www.kiwiwealth.co.nz/about-the-custodian

Thanks, I had that question too and was going to pose it to Hatch. But that answers things well enough for me.

[huxley]

Thanks, I had that question too and was going to pose it to Hatch. But that answers things well enough for me.


Hold the phone:

* https://help.hatchinvest.nz/investing/investments/do-i-own-my-shares

* http://www.icbc.com.cn/ICBC/E-banking/PersonalEbankingService/AccountManagement/CustodyAccount/

So... they're held by an institution which is 70% owned by the Chinese govt? Such a random way to invest in the US!

[huxley]

Made a small deposit to see how it goes, will make an intail investment in Altria (mo), good USD income play.
:)

[peat]

So... they're held by an institution which is 70% owned by the Chinese govt? Such a random way to invest in the US!

Weird!.
Or, is it just the xenophobia?

[huxley]

Weird!.
Or, is it just the xenophobia?

Fair enough! I did think that as I posted, if it had been a bank in any OECD country would it stand out..

[blackcap]

Weird!.
Or, is it just the xenophobia?

Nothing to do with xenophobia, China is a big red flag for me with their increasingly restrictive political climate, non democracy, president for life, clamping down on citizens, vauge property rights etc. I would not want my investments tied up in a country such as China.

[huxley]

Yeah, I tend to agree.. it’s something to keep in mind.. I’m prepared to put a small amount through though, under $50k to avoid worrying about the fif taxes.

[macduffy]

Nothing to do with xenophobia, China is a big red flag for me with their increasingly restrictive political climate, non democracy, president for life, clamping down on citizens, vauge property rights etc. I would not want my investments tied up in a country such as China.

…...and I thought you were talking about the USA!

[dobby41]

…...and I thought you were talking about the USA!

The shares may be in USA companies but they are effectively kept in China.
Is it possible to then get caught up in Chinese rules that change at the whim of the Govt?

[huxley]

…...and I thought you were talking about the USA!

Hahahaha good point :D

[whirly]

China is a big red flag for me haha I see what you did there.