Smart TENZ and FONZ

[ENP]

What's everyones opinion on these?

Are they ideal for someone who wants to diversify across a few different companies or are they a waste of time?

Just looking at the charts on NZX they have both got down-trends in their share price since opening.

[777]

I use OZY and AFI for wider exposure in Australia. Has worked well for me over the last 10 years or so. Easier to buy individual stocks in NZ. TENZ of course has had to suffer the high weighting of TEL in it's performance. You can also look at the Fisher stable for similar listed funds as an alternative.

http://www.kingfish.co.nz/

[CJ]

TENZ of course has had to suffer the high weighting of TEL in it's performance.

FONZ reduces this by capping any share to 5% of the portfolio.

I have Ozzy and Winz to get international diversification and buy direct in NZ. I favour the NZ utilities (power and ports) in NZ.

[Snoopy]

You can also look at the Fisher stable for similar listed funds as an alternative.

http://www.kingfish.co.nz/

IMO Fisher Funds are not an alternative to an index fund. Fisher Funds have higher management fees, as do all active managers, as well as bonus performance fees if they have a good year. Of course they do not give a discount on management fees if they underperform....

If you believe that Fishers are good at picking winners then you could hold something like kingfish *as well as* an index fund. But I don't think you can say that one is a substitute for the other.

SNOOPY

[Snoopy]

What's everyones opinion on these?

Are they ideal for someone who wants to diversify across a few different companies or are they a waste of time?

Just looking at the charts on NZX they have both got down-trends in their share price since opening.

Remember that divdends paid on the NZX50 index are accumulated and added into the index as reinvested funds. By contrast dividends from TENZ and FONZ are paid out to investors and not included in the charted unit price.

SNOOPY

[777]

IMO Fisher Funds are not an alternative to an index fund. Fisher Funds have higher management fees, as do all active managers, as well as bonus performance fees if they have a good year. Of course they do not give a discount on management fees if they underperform....

If you believe that Fishers are good at picking winners then you could hold something like kingfish *as well as* an index fund. But I don't think you can say that one is a substitute for the other.

SNOOPY

Snoopy ENP was not looking for an index fund, just diversification. That is why I suggested KFL as an alternative.

[ENP]

So does the FONZ index fund basically just buy the top 50 companies in NZ, have a small management fee and pay you your share of dividends? The share price goes up and down as would a normal share on the NZX share market?

Any other major things apart from what I've said above that's different?

[CJ]

So does the FONZ index fund basically just buy the top 50 companies in NZ, have a small management fee and pay you your share of dividends? The share price goes up and down as would a normal share on the NZX share market?

Any other major things apart from what I've said above that's different?

That is pretty much it. Note that the way it calculates the index is different to the NZX50 which are weighted by market cap (therefore Telecom has a big share). FONZ caps any investment at 5% so all the biggest companies will be at 5% and you will get a bigger percentage of smaller companies than represented on the NZX50.

[ENP]

So basically if I had enough money to buy all the shares in the NZX 50, essentially copy what FONZ does, I'd have the same return (apart from management fees and brokerage)

[CJ]

So basically if I had enough money to buy all the shares in the NZX 50, essentially copy what FONZ does, I'd have the same return (apart from management fees and brokerage)

yes if you followed the same percentages. Note that FONZ re-balances every three months I think based on its modified index (as i discuss above)