There's a lot to answer so it will be hard to keep it down to a short message:

* Diversification
You may be missing the details of the individual shares being held. That is for eg. the Vanguard shares are already a diversified holding of many many different shares in that index. So these ETFs you're looking at may have the bulk of the $ in a widely diversified stock such as Vanguard.

*Fees
The main difference is due to economies of scale. Naturally Vanguard is among the lowest in the industry as Jack Bogel (RIP) had pioneered the low cost ETF system. Anyone else that is trying to replicate his model won't do so because they're not big enough. None of the NZ funds like in Kiwi Saver will come close to this 0.03% p.a. management fee. When a private hedge fund tries to duplicate the same returns of an index, it cost them $ to allocate certain portions of the funds to each holding, it's a lot of paperwork on a daily basis and these trade / holding data much be held perpetual.

*Fees again,
Again, it's not likely other ETFs will produce a better return when you factor the higher fees they charge. What makes ETFs unique than yourself trying to buy each individual stock in the index is they have re-balance mechanisms in play. For eg. take the S&P500 index which is the top 500 performing stocks. Periodically 1 or 2 stocks gets bumped off (ie General Electric) and to be replaced by an up an new rising stock (Walgreens ; pharmacy). The ETF managers would require to sell off the GE holding and buy the new Walgreen stock. As an individual, if you're not watching day by day and keep up with the finance, you may never know and end up with what you though as having a diversified index but actually holding a risky holding of stocks.

* Foreign exchange risk / hedge
Historically the NZX has performed a lot less than the US market. The reality is that if you want diversification, you just can't hold NZ listed shares because for the level of return for the risk you take is really not wise investing. I studied finance in Canada and the Canadian equity market only accounts for a whopping 3% of the GLOBAL investing market. It's like walking into a grocery store and picking only 1 shelf out of all the isles you can look to buy. This is not wise.

The 2nd problem is NZ's FIF tax rules by IRD. You have a $50K NZD threshold for overseas investments in shares. Once you go over that amount, then you trigger a lot of tax issues, complicated filing ($ for the accountants each year to organise your tax return). etc. and in this day of age $50K is not a lot of money. The FIF is a tax on paper gains (without addressing tax credit on years where you go negative). So you can easily have a situation where you've paid no tax on the years you've lost, but then when you rebound back, IRD taxes up to 5% of the gain for the years where you go back positive. It's like climbing an uphill battle. Some NZ financial advisors say the 5% FIF tax is small... but then explain why Jack Bogle has been so against on high management fees (or taxation) of the account? It's because to get the maximum impact for a retirement account, you need tax free compounding (just like the capital gains on houses in NZ have grow tax free for the past... 40 years?). I'm quite certain the formation of the FIF was geared to lock down NZ investors to choose in favour of Kiwi Saver. The start reality is Kiwi Saver may be less than 0.1% of the global investment options.

As for USD exchange rates go. Again, the world will move on if the NZ economy takes a dump. But if the US economy heads into recession, then the WHOLE world will be affected. On a macro level, you're best to hold USD currency as the direction of socialist nations like NZ is to raise taxes (ie Carbon taxation) which will erode the standard of living. Places like in the US that have lowered taxes and regulation will prosper more having a strong USD currency. It's also the reason why the NZD currency always pays a higher interest rate than USD (because of the higher risk holding the NZD).