Low Fee Investments

[Kiwimm]

I hate paying fees for other people to manage my money. I am looking to minimise my fees whilst having a diversified share investment. I would look to pay in a few thousand a month. I was formally in the UK where I could find many index trackers and ETFs with fees of 0.3% or less per year.

From my research so far, I have the following:

Buy NZ and AU shares directly - transaction costs only and need a lot of money to diversify successfully
Buy Smartshares - 0.6-0.75% management fee but limited to only a few shares i.e. too banking and mining heavy in AU, too much Telecom in NZ
AMP WiNZ index tracker - is now closed as of 29 June
Superlife investments - already use these for my Kiwisaver so don't want all my eggs in one basket
Managed funds - management fees too high (1%+)


Can anyone point me to any other investments which are diversified, passive, low-fee and have PIE status?

[CJ]

The NZ market sucks for this sort of thing. Best option is probably to head overseas for the likes of the iShares. May have tax implications and entry costs may be high due to be an overseas transaction.

WHile I was looking to get out of my WINZ investment anyway, it is annoying that they are closing. Hopefully Smartshares launches an international one, though as you say the management fee is high for an index fund (I sold out of my investment in these at the start of the year for this reason and because my portfolio has grown to be diversified enough for my liking).

[777]

Same fees that you dislike but performance to date has covered them.

http://www.piefunds.co.nz/

[Kiwimm]

Today's star performer is tomorrow's loser.

I would rather not try to beat the index (just aim to match it) and lose as little to fees/tax along the way as possible. I am in this for the long haul not for speculative gains.

[CJ]

Today's star performer is tomorrow's loser.

I would rather not try to beat the index (just aim to match it) and lose as little to fees/tax along the way as possible. I am in this for the long haul not for speculative gains.Let us know what you find/choose then as I dont really think you are catered for in the NZ market.

[Kiwimm]

I notice on Vanguard Australia's site that it says:

Foreign users
This website is for Australian residents and investors and New Zealand investors investing through the Vanguard Index Funds Investment Statement. This website has not been constructed with any other country in mind. Investments will not be accepted from residents of other countries unless permitted by law. References to dollars are to Australian dollars unless otherwise specified.

Has anyone bought any ETFs through Vanguard? It says you need to pay using BPAY so you would need an AU bank account. They offer the S&P500 ETF at 0.06% per annum.

[percy]

Same fees that you dislike but performance to date has covered them.

http://www.piefunds.co.nz/

I don't hold,but that performance is excellent.I have found good companies always seem to surprise on the upside,while poor companies surprise on the downside.Would expect piefunds to surprise on the upside.I have read piefunds newsletter a few times.Clearly written with their ideas plainly set out.A sensible simple honest approach in my opinion.

[CJ]

I don't hold,but that performance is excellent.I have found good companies always seem to surprise on the upside,while poor companies surprise on the downside.Would expect piefunds to surprise on the upside.I have read piefunds newsletter a few times.Clearly written with their ideas plainly set out.A sensible simple honest approach in my opinion.I agree if I was going to choose an active fund, they would be my current choice. Their small size means they can dabble in the mid-stocks which dont have enough liquidity for the bigger funds to get in and out of.

Kiwimm - Would be interest in the findings of your research into the Australian ETF. Your broker may be able to handle all of the admin (ie.BPay).

[Kiwimm]

I will investigate on Monday. Not sure that transferring money to Australia to put it in a US-denominated ETF is going to be an efficient way of investing. The currency losses may be too high and double exchange rate risk might make it too volatile.

[grach017]

I too would be interested in such an aussie ETF just with less $ frequency as yourself. Will have a word to the broker also.. if you get any success would you be kind enough to name drop the broker you used?

Would be tempted to leverage that as a 'well this lot can do it'

[CJ]

Article on point re investing in an Active NZ pie vs overseas index ETF : http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=10834864

Its a shame the iShares aren't repackaged for the NZ market onto the NZX. NZX should be pursuing but that would ruin their own Smartshare product.

[Lizard]

The difficulty I have with using any Smartshares products is that whenever I draw a comparative price chart against the nearest index (in Yahoo Finance), the underperformance of Smartshares seems signficant. I haven't ever looked any closer to find out what this is, but presume it is fee related? Or perhaps Yahoo is not adjusting correctly for dividends on the ETF's?

4150
4151

[slowmover]

You can buy some Vanguard eg VTS on ASX as you would any Australian share.

[Snoopy]

The difficulty I have with using any Smartshares products is that whenever I draw a comparative price chart against the nearest index (in Yahoo Finance), the underperformance of Smartshares seems significant. I haven't ever looked any closer to find out what this is, but presume it is fee related? Or perhaps Yahoo is not adjusting correctly for dividends on the ETF's?


As far as I am aware the NZX50 is the only share index globally to include the cumulative effects of dividends. I suspect Yahoo is not adjusting correctly for dividends because they don't adjust for dividends at all on any of the shares (including Smartshares) they chart.

From a global perspective Smartshares fees are high (around 1%). But not high enough I would guess to produce the lack of correlation your graphs depict Lizard.

SNOOPY

[Sauce]

Today's star performer is tomorrow's loser.

I would rather not try to beat the index (just aim to match it) and lose as little to fees/tax along the way as possible. I am in this for the long haul not for speculative gains.

Smart, smart, smart