ETFs are not a magic bullet. When it comes to investing, nothing is a magic bullet, even owning a house. The reason the VWO is highly invested in Chinese / Asian stocks is due to the type of ETF, hence "Emerging Market". The investor needs to be aware of what area they want their $ put in. Any large % weight allocated to the EFT should be balanced based on 'market size' of the stock. So if you see something like 25% of the ETF is Commonwealth Bank of Australia - that may be perhap that ETF is focused on a certain sector (banks?) and the value of that stock represents an equally weighted proportion of the index it trades in. They're not taking say $1000 and equally dividing it up to buy every stock in the index of same value, it's proportion to the market cap size of each stock and at the end of each day, the ETF has to 'rebalance' the portions so not 1 single stock becomes more riskier than the other.
There won't be. The FIF rules mainly apply to individuals that DIRECTLY hold overseas stocks (exception of some ASX listings). Such as having a discount brokerage account in the US where you directly buy the Vanguard ETF in your name. The reason is the FIF is suppose to regulate individuals away from doing direct investing and channeling them through to invest in local, NZ funds ; after all (and correct me if i'm wrong) it was Bill English that formulated the Kiwi Saver and introduced the FIF tax laws in order to get Kiwi Saver going. The NZ funds themselves in ETF or managed / hedge form operate the investments in 2 ways. Either PIR (Prescribed Investor Rate) or solo where the fund pays a flat rate 28% tax. The PIR is suppose to give the low income investors an advantage be being taxed at the lower bracket. I'm not a fan of this way of investing and personally, the NZ Super pension fund could do a far better job for the NZ citizen by directly buying the ETF as it does not have to deal with paper work and paying ANNUAL TAXATION on the gains. This is why Jacinda Ardern is so fired up about investors owning rental properties because they can long term pay no capital gains tax.
Correct as I mentioned before. Smartshares would end up paying taxes on the paper gains.
At Warren Buffet's said in his 2018 annual meeting, gold will never have the return of a productive asset.
https://www.youtube.com/watch?v=tVutQfL3XdU
Generally speaking and historically, gold has been a benchmark against inflation. But you could do the same thing by owning a house (and you get the benefit of living in it). So you find any NZ based fund with the emphasis on gold. If you're serious about wanting gold, don't invest in it.. you would be better to own it physical. Preferably in 1 oz wafers and not in value added coin form. The gov'ts in both NZ and Canada have no reserves in gold. It's not even a taxable item in NZ in terms of GST or duties. But if you think of gold as an investment.. think again.
The Bid and Ask price difference is called the spread. Has nothing to do with margin loss. During trading hours, it's just simply a display (in real time) of the seller asking how much they're willing to sell VS the buyer that is what they're willing to pay. If the person puts in a "market order" to BUY then the order gets executed immediately at the ASK price. Same applies to the person wanting to sell. I have no experience with Smartshares so can't comment anything on their trading platform. How are they executing buy orders for customers that pay each day?
All in all, i'm quite biased against the NZ tax treatment against NZ investors in direct stock ownership abroad or in Kiwi Saver ; for the simple reason that paper gains are taxed annually, which has a MAJOR impact against compounding returns. NZ prides on having a simple tax system, but then you do away with any tax planning. There's no CUMULATIVE tax free contribution limits, no tax deferring of investments (so that upon retirement, you structure the sale of your shares, and how much) at a time when your income is already low, so you can be in the low income tax bracket. The reality is there's very little gain for those in Kiwi Saver because when you compare the avg NZ in Kiwi Saver vs the avg Cdn in their RRSP. In 40 years time the Cdn pensioner is going to be miles and miles ahead of the Kiwi person that it would be a laugh.