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Thread: ETF's

  1. #21
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    Quote Originally Posted by RupertBear View Post
    So unless you have a broker or have an ASB or ANZ share account you cant sell your smartshares. So the so called 'Mum and Dad" long term investors buy ETFs and then they cant sell them? Seems a fatal flaw in the system to me and it has put me off buying any.
    We'll, yes.. but I guess that's the idea behind an exchange traded fund... It would've been the same situation for any "mum &a dad" investors who purchased shares in the state owned enterprises a couple of years ago.. also I don't think they try and hide the fact you have to sell on market.

    If you are holding these instruments long term you don't need to worry for many years right?

    Anyway, maybe it would be helpful if the NZX focused their retail offerings better. There seems to be an opportunity to align the SuperLife website with Smartshares.

  2. #22
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    Quote Originally Posted by Kelvin View Post
    Can anyone point me in the direction of where to find Superlife ETF fees (nothing on their website)?

    Or are the fees the same as purchasing via Smartshares?

    Wouldn't NZX via a broker be more expensive than Smartshares as in Smartshares any subsequent purchases do not incur a brokerage fee?
    https://superlife.co.nz/superannuation/fees

  3. #23
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    Quote Originally Posted by huxley View Post
    Thanks.

    So it looks like Smartshares has a slightly higher management fee plus a $30 establishment fee, then at least a $30 fee to sell on-market

    Superlife has a lower management fee and a $12 yearly admin fee. But looks like no fee to buy or sell

  4. #24
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    I rang up Smartshares the other day. I was told that I didn't need to be too concerned about liquidity and that they do purchase off the market. I probably should have asked for more details as I'm not sure how they decide what price to purchase them at.

  5. #25
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    Is going through superlife / smartshares the best way to invest in vanguard ETF's like the S&P500 or Total world stock market here in NZ?

  6. #26
    Junior Member Dean@Smartshares's Avatar
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    Hi Sharetrader members,

    The Smartshares team have created their own Sharetrader account. This is our first post, and our team is looking forward to answering any questions you might have about the Smartshares range of ETFs.

    In this thread there were questions on the liquidity of the Smartshares ETFs. To confirm, Smartshares does have a dedicated market maker, which provides liquidity for investors with spreads around the NTA value. That means that although an ETF may not trade every day, you can buy and sell when you want because there is a market maker always posting buy and sell prices.

    In addition, there were comments that some holders find it difficult to monitor their portfolio value and performance. If you visit Link Market Services at http://www.linkmarketservices.co.nz/ (Smartshares share registry) you can login and see your unit balance, tax returns, and dividends, as well as update your account details.

    If you want to see current performance reporting you will need to load your holding details into a portfolio tool, such as sharesight.co.nz – this has been mentioned by several members. Smartshares does not currently offer a performance reporting tool, but we are interested in your feedback and will take this suggestion on board.
    Dean Anderson

    SMARTSHARES PRODUCT MANAGER

  7. #27
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    Well done Dean and welcome. Good to have you guys here to answer queries and guide us along with regards to the ETFs

  8. #28
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    Quote Originally Posted by Dean@Smartshares View Post
    In this thread there were questions on the liquidity of the Smartshares ETFs. To confirm, Smartshares does have a dedicated market maker, which provides liquidity for investors with spreads around the NTA value. That means that although an ETF may not trade every day, you can buy and sell when you want because there is a market maker always posting buy and sell prices.
    Hi Dean,

    I have a question about the mechanics of ETFs. Specifically around the market maker and liquidity.

    1. When I look at the depth of say the MDZ, why are there apparent two sets of buy / sell prices of different volumes from what I assume is the market maker. In the case of MDZ I see a buy / sell volumes of 45,000 and 100,000 on both buy and sell sides.

    2. Is the market maker autonomous or is there a human behind this? If I sell 100,000 shares, will another 100,000 shares be placed on the market for sale immediately?

    3. If I try to sell 500,000 shares at the market maker price, because there is only ever 100,000 on the buy side, what happens? Will the market maker buy them all at once? Will it be immediate or does a human get involved?

    4. In relation to question 2 and 3 - What happens during a liquidity event when there are a large number of sellers? How does the market maker handle this when the underlying asset values might be dropping significantly intraday.

    I like the Smartshare offering, and during the normal market conditions I can see everything works fine, but I want to be clear what happens during a crisis.

  9. #29
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    Quote Originally Posted by Thor View Post
    Hi Dean,

    I have a question about the mechanics of ETFs. Specifically around the market maker and liquidity.

    1. When I look at the depth of say the MDZ, why are there apparent two sets of buy / sell prices of different volumes from what I assume is the market maker. In the case of MDZ I see a buy / sell volumes of 45,000 and 100,000 on both buy and sell sides.

    2. Is the market maker autonomous or is there a human behind this? If I sell 100,000 shares, will another 100,000 shares be placed on the market for sale immediately?

    3. If I try to sell 500,000 shares at the market maker price, because there is only ever 100,000 on the buy side, what happens? Will the market maker buy them all at once? Will it be immediate or does a human get involved?

    4. In relation to question 2 and 3 - What happens during a liquidity event when there are a large number of sellers? How does the market maker handle this when the underlying asset values might be dropping significantly intraday.

    I like the Smartshare offering, and during the normal market conditions I can see everything works fine, but I want to be clear what happens during a crisis.
    Great questions, cheers for asking. I was wondering the samething & look forward to their answer.

  10. #30
    Junior Member Dean@Smartshares's Avatar
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    Great to receive some follow up questions.

    I've added your questions below with our response for ease of reading.

    1. When I look at the depth of say the MDZ, why are there apparent two sets of buy / sell prices of different volumes from what I assume is the market maker. In the case of MDZ I see a buy / sell volumes of 45,000 and 100,000 on both buy and sell sides.

    Smartshares: Correct, the market maker is providing two tiers of liquidity. The market maker is contracted to provide this depth and the two tiers assists in the balance of providing liquidity to the market and allowing the market maker to manage their risk exposure.

    2. Is the market maker autonomous or is there a human behind this? If I sell 100,000 shares, will another 100,000 shares be placed on the market for sale immediately?

    Smartsares: There is a combination of automation and human elements.
    If you place an order for 100,000 shares and it traded with the market maker, the market makers volumes will typically refresh in a short period of time. The speed and volumes are determined by the market maker and will depend on the current market environment.

    3. If I try to sell 500,000 shares at the market maker price, because there is only ever 100,000 on the buy side, what happens? Will the market maker buy them all at once? Will it be immediate or does a human get involved?

    Smartshares: For large and wholesale investors we suggest they contact us at Smartshares and we can work through the various options such as a arranging the market maker to provide additional liquidity.

    4. In relation to question 2 and 3 - What happens during a liquidity event when there are a large number of sellers? How does the market maker handle this when the underlying asset values might be dropping significantly intraday.

    Smartshares: The market maker will adjust the price of the ETF units to reflect the prices in the underlying securities. So if the price in the underlying securities starts falling, the market maker will adjust the price of the ETF accordingly. If the market maker is buying ETF units (because ETFs unitholders are selling), they will offset this by immediately selling the underlying securities of the ETF. They will then redeem the ETF units they have bought for the underlying securities and deliver them for settlement.

    Starting in September last year, there was a 2 month period where the S&P/NZX 50 declined approximately 13%. During that period we saw no increase in selling behaviour as the majority of investors are long term investors who do not typically react to short term events.
    Dean Anderson

    SMARTSHARES PRODUCT MANAGER

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