The ultimate guide to index funds in New Zealand

Index funds are an increasingly popular way to invest – they have low fees, can provide diversification across different companies and industry sectors, and save us from having to research and pick individual stocks. But with so many index funds on offer it can feel like being a kid in a candy shop – there’s so many great funds to choose from, but no clear direction on where to start. In this article we break down the options to help you make an informed decision on which index funds to invest in and they might fit into your investment portfolio.

Background info:
Before reading this article check out the below if you want more detail on what an index fund is, how they work, and how they differ from ETFs:
Funds 101 – What’s the difference between an Index Fund, ETF, and more?
What do NZX 50, S&P 500, and Total World index funds actually invest in?

This article covers:
1. NZ index funds
2. Global index funds
3. Regional index funds
4. Sector & Thematic index funds
5. Bond index funds
6. Diversified funds

1. NZ index funds

The first index funds we’ll cover are those investing in the New Zealand sharemarket. You can invest in them to get exposure to our home market. A little home bias in your portfolio can be beneficial, mostly due to tax advantages that give NZ shares a ~1% per year head start over international shares.

NZX 50

There’s 5 index funds that track (invest in) the S&P/NZX 50 index, or a variation of it. This is New Zealand’s major sharemarket index containing the largest 50 companies listed on the NZX. Two funds track the main S&P/NZX 50 Index:

  • Smartshares S&P/NZX 50 ETF (NZG)
  • Macquarie NZ Shares Index Fund

Two funds track the S&P/NZX 50 Portfolio Index. The difference between the Portfolio index and the main index is that the Portfolio index has a maximum weighting of 5% towards any single company. For example, Fisher and Paykel Healthcare makes up about 12% of the main index, but only a maximum of 5% of the Portfolio index. This means the Portfolio index has a slightly higher exposure to the smaller companies on the NZX:

  • Smartshares NZ Top 50 ETF (FNZ)
  • Harbour NZ Index Shares Fund

Lastly, two funds have a sustainability twist on the NZX 50:

  • Kernel NZ 50 ESG Tilted Fund – Tracks the S&P/NZX 50 Portfolio ESG Tilted Index. Excludes SKYCITY (for gambling) and Z Energy (for fossil fuels), and also weights each company up or down according to their ESG score – companies with positive environmental, social, and governance practices make up a larger proportion of the fund, compared to companies with less positive practices.
  • Harbour Sustainable NZ Shares Fund – Tracks the S&P/NZX 50 Portfolio Index, but is modified by Harbour to exclude a number of companies like SKYCITY, Z Energy, Air New Zealand, and Genesis. Technically not an index fund due to the modifications.

The below table shows some key facts about each index fund – a link to each fund, its annual management fee, and the number of countries, industry sectors, and companies each fund invests in:

FundFeeCountriesSectorsCompanies
Smartshares
S&P/NZX 50
0.20%21050
Macquarie
NZ Shares
0.36%21050
Smartshares
NZ Top 50
0.50%21050
Harbour
NZ Index Shares
0.20%21050
Kernel
NZ 50 ESG
0.25%2947
Harbour
Sus. NZ Shares
0.25%2944

Despite being NZ funds, these funds have exposure to 2 countries (NZ and Australia). That’s because these funds invest in Westpac and ANZ banks, who are listed on the NZX but are considered to be Australian companies.


Large cap

These funds invest only in the larger companies on the NZX. If you’re already invested in a NZX 50 fund, you probably don’t need these large cap funds in your portfolio, as NZX 50 funds will already have plenty of exposure to these companies. However, the Kernel NZ 20 fund is a viable substitute for NZX 50 funds.

  • Smartshares NZ Top 10 ETF (TNZ) – Invests in the 10 largest companies listed on the NZX. Tracks the S&P/NZX 10 Index.
  • Kernel NZ 20 Fund – Invests in the 20 largest companies listed on the NZX. Tracks the S&P/NZX 20 Index.
FundFeeCountriesSectorsCompanies
Smartshares
NZ Top 10
0.60%1410
Kernel
NZ 20
0.25%1720

Mid cap

These funds invest only in the smaller companies on the NZX. Like the large cap funds, these funds probably aren’t needed if you’ve already invested in a NZX 50 fund. However, the Kernel Mid & Small Cap Opportunities Fund is interesting as it contains a few smaller companies outside of the NZX 50 – It could complement the Kernel NZ 20 Fund in making up the NZ shares portion of your portfolio.

  • Smartshares NZ Mid Cap ETF (MDZ) – Invests in the 11th to 50th largest company listed on the NZX, excluding ANZ and Westpac. Tracks the S&P/NZX Mid Cap Index.
  • Kernel NZ Mid & Small Cap Opportunities Fund – Invests in the smaller NZX listed companies outside the NZX 20 Index (including several companies outside the NZX 50). Tracks the S&P/NZX Emerging Opportunities Index.
FundFeeCountriesSectorsCompanies
Smartshares
NZ Mid Cap
0.60%11038
Kernel
NZ Mid & Small Cap
0.25%11039

Other NZ funds

There’s a couple of other NZ index funds that don’t quite fit into the above categories:

  • Smartshares NZ Dividend ETF (DIV) – Invests in the 25 highest dividend paying companies within the NZX 50. Great if you’re looking to earn dividends, but will likely have lower potential for capital growth. Tracks the S&P/NZX 50 High Dividend Index.
  • Simplicity NZ Share Fund – Invests in a wide range of NZ shares, tracking the Morningstar New Zealand Index (a somewhat cut down version of the NZX 50). The fund excludes a couple of companies for ethical reasons (e.g. SKYCITY for gambling).
FundFeeCountriesSectorsCompanies
Smartshares
NZ Dividend
0.54%2825
Simplicity
NZ Share
0.10%11140

Further Reading:
Smartshares vs Macquarie vs Kernel vs Harbour – NZ Share Index Fund shootout

2. Global index funds

Investing in global index funds allows you to diversify portfolio internationally. They invest broadly across US, European, and Asian sharemarkets, and beyond.

Global shares

Our first three global funds invest in both developed markets (countries like the US, UK, Japan, Canada, and Australia) AND emerging markets (countries like China, India, Brazil, and Indonesia):

  • Smartshares Total World ETF (TWF) – Invests in large, mid-size, and small-cap companies from around the whole world. Tracks the FTSE Global All Cap Index.
  • Smartshares Total World (NZD hedged) ETF (TWH) – Invests in the same as above, but is 100% hedged to the NZ Dollar to greatly reduce exchange rate volatility.
  • Macquarie All Country Global Shares Index Fund – Invests in companies from around the whole world, excluding those involved with tobacco. Tracks the MSCI All Country World ex Tobacco Index. The fund is 69% hedged to the NZ Dollar.

These two global funds invest in developed markets only:

Lastly, there’s two Vanguard funds available on the InvestNow platform that are popular with Kiwi investors. They also invest in developed markets only. They’re a bit different from the other funds in this article being overseas domiciled funds, with the main implication being that they’re taxed under the FIF tax regime.

  • Vanguard International Shares Select Exclusions Index Fund – Invests in companies from across developed markets, excluding those engaging in contentious activities such as weapons and tobacco. Tracks the MSCI World ex Australia, ex Tobacco, ex Controversial Weapons, ex Nuclear Weapons Index
  • Vanguard International Shares Select Exclusions Index Fund (Hedged) – NZD Class – Invests in the same as above, but is 100% hedged to the NZ Dollar.
FundFeeCountriesSectorsCompanies
Smartshares
Total World
0.40%48119,472
Smartshares
Total World Hedged
0.46%48119,472
Macquarie
All Country
0.42%47112,918
Kernel
Global 100
0.25%1011100
Smartshares
Global Equities ESG
0.54%2311676
Vanguard
Intl. Shares
0.20%23111,455
Vanguard
Intl. Shares Hedged
0.26%23111,455

What is currency hedging?
Some funds use currency hedging to reduce the exchange rate fluctuations associated with investing in overseas assets. See below for more info:


Other global funds

Also in the global funds category we have a dividend focussed fund:

FundFeeCountriesSectorsCompanies
Kernel
Dividend Aristocrats
0.25%151193

Further Reading:
Smartshares vs Vanguard vs Macquarie vs Kernel – International Share Index Fund shootout

3. Regional index funds

These index funds give you exposure to shares in a specific country or region. They’re not necessary to have in your portfolio if you already have global funds, as global funds already have large allocations to the US market and smaller allocations to Europe and Asia. However, they might be useful if you want to concentrate your portfolio towards a certain country/region.

United States – S&P 500

Two index funds track the famous S&P 500 index, which contains the ~500 largest companies listed on the US sharemarkets. S&P 500 index funds are considered by some to be a substitute for global index funds, given many of its constituent companies have global economic exposure (~30% of S&P 500 revenues come from outside of the US). So it’s definitely a viable option to use as your international shares exposure, but has the limitation of being US centric and not including companies listed in any other countries.

  • Smartshares US 500 ETF (USF) – Tracks the S&P 500 Index. Unhedged to the NZ Dollar.
  • Kernel S&P 500 Fund – Tracks the S&P 500 Dynamic Hedged Index. 100% hedged to the NZ Dollar to greatly reduce exchange rate volatility.
FundFeeCountriesSectorsCompanies
Smartshares
US 500
0.34%111505
Kernel
S&P 500
0.25%111505

Other US funds

Smartshares also offers 5 index funds that invest in different subsets of the US sharemarkets:

  • Smartshares US Equities ESG ETF (USA) – Invests in companies listed on the US sharemarkets, excluding those engaging in contentious activities such as weapons and tobacco. Tracks the MSCI USA ESG Screened Index.
  • Smartshares US Large Growth ETF (USG) – Invests in large “growth” companies listed on the US sharemarkets. These are companies that are seen to have higher potential for growth. Tracks the CRSP US Large Cap Growth Index.
  • Smartshares US Large Value ETF (USV) – Invests in large “value” companies listed on the US sharemarkets. These are companies that have lower growth prospects, but are seen to be trading at a lower price than what they’re actually worth. Tracks the CRSP US Large Cap Value Index.
  • Smartshares US Mid Cap ETF (USM) – Invests in mid-sized companies listed on the US sharemarkets. Tracks the CRSP US Mid Cap Index.
  • Smartshares US Small Cap ETF (USS) – Invests in small-sized companies listed on the US sharemarkets. Tracks the CRSP US Small Cap Index.
FundFeeCountriesSectorsCompanies
Smartshares
US ESG
0.34%111592
Smartshares
US Large Growth
0.51%111265
Smartshares
US Large Value
0.51%111349
Smartshares
US Mid Cap
0.51%111369
Smartshares
US Small Cap
0.51%1111,529

Australia

Smartshares offers four ETFs that invest in the Australian sharemarket:

  • Smartshares S&P/ASX 200 ETF (AUS) – Invests in the 200 largest companies listed on the ASX. Tracks the S&P/ASX 200 Index.
  • Smartshares Australian Top 20 ETF (OZY) – Invests in the 20 largest companies listed on the ASX. Tracks the S&P/ASX 20 Index.
  • Smartshares Australian Mid Cap ETF (MZY) – Invests in the 51st to 100th largest company listed on the ASX. Tracks the S&P/ASX Mid Cap 50 Index.
  • Smartshares Australian Dividend ETF (ASD) – Invests in high dividend paying companies listed on the ASX. Tracks the S&P/ASX Dividend Opportunities Index.
FundFeeCountriesSectorsCompanies
Smartshares
S&P/ASX 200
0.30%411200
Smartshares
Aus Top 20
0.60%1920
Smartshares
Aus Mid Cap
0.75%31150
Smartshares
Aus Dividend
0.54%31048

Rest of the world

Lastly, Smartshares offers 6 index funds investing in other regions around the world:

FundFeeCountriesSectorsCompanies
Smartshares
Europe
0.55%16111,329
Smartshares
Europe ESG
0.55%1511414
Smartshares
Asia Pacific
0.55%6112,458
Smartshares
Japan ESG
0.55%111254
Smartshares
Emerging Markets
0.59%23114,322
Smartshares
Emerging Mkts ESG
0.59%24113,053

4. Sector & Thematic index funds

These funds invest in a single industry sector or theme. They’re not essential to have as the above broad market funds already have at least a small amount of exposure to each sector. But they can still be used as a small part of your portfolio to “tilt” your portfolio and get more exposure to these specific industries.

Real estate

These index funds invest only in Real Estate Investment Trusts (REITs), which are companies that own, develop, and rent out property:

FundFeeCountriesSectorsCompanies
Smartshares
NZ Property
0.54%118
Kernel
NZ Property
0.25%118
Macquarie
Australasian Prop.
0.82%2134
Smartshares
Aus Property
0.54%1122
Kernel
Global Property
0.25%231252

Other sector funds

  • Kernel Global Infrastructure Fund – Invests in companies that derive at least 70% of their revenues from infrastructure type businesses such as transportation, water, or communications. Tracks the Dow Jones Brookfield Global Infrastructure Index.
  • Smartshares Australian Financials ETF (ASF) – Invests in companies in the financials industry (e.g. banks and insurance companies) within the ASX 200. Tracks the S&P/ASX 200 Financials Ex-A-REIT Index.
  • Smartshares Australian Resources ETF (ASR) – Invests in companies in the resources industry (e.g. mining and energy companies) within the ASX 200. Tracks the S&P/ASX 200 Resources Index.
FundFeeCountriesSectorsCompanies
Kernel
Global Infrastructure
0.25%205102
Smartshares
Aus Financials
0.54%3129
Smartshares
Aus Resources
0.54%1240

Thematics

Thematic funds invest in a specific innovative or disruptive trend. These tend to be more speculative in nature – riskier investments, with the potential for higher returns:

  • Kernel Kensho Moonshots Innovation Fund – Invests in companies involved in emerging and disruptive sectors such as cybersecurity, genetic engineering, and space. Tracks the S&P Kensho Moonshots Index.
  • Kernel Kensho Electric Vehicle Innovation Fund – Invests in companies involved in the electric vehicle ecosystem including manufacturers and charging infrastructure. Tracks the S&P Kensho Electric Vehicles Index.
  • Kernel Global Clean Energy Fund – Invests in companies involved in producing clean energy or providing clean energy technology and equipment. Tracks the S&P Global Clean Energy Index.
  • Smartshares Automation and Robotics ETF (BOT) – Invests in companies involved with developing automatic and robotic technology. Tracks the iSTOXX FactSet Automation & Robotics Index.
  • Smartshares Healthcare Innovation ETF (LIV) – Invests in companies involved with innovative developments in the healthcare sector. Tracks the iSTOXX FactSet Breakthrough Healthcare Index.
FundFeeCountriesSectorsCompanies
Kernel
Moonshots
0.45%6650
Kernel
EV Innovation
0.45%7250
Kernel
Clean Energy
0.45%23575
Smartshares
Automation & Robotics
0.75%105130
Smartshares
Healthcare Innovation
0.75%112188

Further Reading:
Smartshares & Kernel – Thematic Index Fund shootout

5. Bond index funds

Bonds are a more conservative asset class compared to shares – they offer lower returns, but are less volatile. They’re not necessary if you’re investing long-term and have a high risk tolerance, but they’re suitable as a “shock absorber” to dampen down the volatility of your portfolio if you’re risk adverse. Bonds can also be a key asset class for short to medium term investors.

Two index funds invest in New Zealand bonds:

  • Smartshares S&P/NZX NZ Government Bond ETF (NGB) – Invests in bonds issued by the NZ Government. Tracks the S&P/NZX NZ Government Bond Index.
  • Simplicity NZ Bond Fund – Invests mostly in NZ government and local government bonds. Tracks the Bloomberg NZBond Govt 0+ Index.

Two index funds invest in overseas bonds:

  • Smartshares Global Aggregate Bond ETF (AGG) – Invests in government and corporate bond issues from around the world. Tracks the Bloomberg Barclays Global Aggregate Index. 100% hedged to the NZ Dollar.
  • SuperLife Overseas Non-government Bonds Fund – Invests in primarily corporate bond issues from around the world. Tracks the Bloomberg Barclays Global Aggregate Government-related and Corporate Index. 100% hedged to the NZ Dollar.
  • Macquarie Ethical Leaders Hedged Global Fixed Interest Index Fund – Invests in government and corporate bond issues from around the world, excluding those related to contentious activities such as weapons and tobacco. Tracks the Bloomberg Barclays MSCI Global Aggregate SRI Select ex Fossil Fuels Index. 100% hedged to the NZ Dollar.
FundFeeCountriesConstituents
Smartshares
NZ Govt. Bond
0.20%113
Simplicity
NZ Bond
0.10%125
Smartshares
Global Agg. Bond
0.30%249,387
SuperLife
Overseas Bonds
0.44%145,513
Macquarie
Global FI
0.43%32604

Further Reading:
Smartshares vs SuperLife vs Macquarie vs Simplicity – Bond index fund shootout

6. Diversified funds

These funds invest in a bundle of multiple index funds, including NZ shares, international shares, bonds, and cash. With each fund covering multiple asset classes, they’re diversified enough to make up the sole holding in your portfolio, saving you from having to research and select individual index funds.

Most diversified funds aren’t pure index funds – some aspects of these funds are actively managed:

  • InvestNow Foundation Series – The bond portion of these funds are actively managed.
  • SuperLife – Most of their funds contain a small allocation to NZ and overseas bond and cash funds which are actively managed.
  • Simplicity – Invests in non-traditional assets like mortgage lending, build-to-rent housing, and private equity.

But many still consider them to be worthy of consideration alongside index funds, as they come with low fees, and are much more simple than picking individual funds.

Aggressive funds

Aggressive funds invest almost entirely into a diversified portfolio of New Zealand and international shares. The lack of bonds and cash means they offer the highest potential returns, but are the most volatile:

  • Kernel High Growth Fund – The only pure index fund here, with no aspects of the fund being actively managed. Invests in NZ shares (29.4%), international shares (58.6%), as well as infrastructure and REITs (10%).
  • SuperLife High Growth Fund – Invests in NZ and Australian shares (25%), international shares (54%), as well as in infrastructure and REITs (10%). The fund is ~65% hedged to the NZ Dollar.
FundFeeAllocation to
shares
Allocation to
bonds
/cash
Kernel
High Growth
0.25%98%2%
SuperLife
High Growth
0.53%99%1%

Growth funds

Growth funds invest around 80% into New Zealand and international shares, and around 20% into bonds. They still offer relatively high potential returns, but are less volatile than aggressive funds:

  • SuperLife Growth Fund – Invests in NZ and Australian shares (19%), international shares (51%), infrastructure and REITs (10%), bonds (14%), and cash (6%). Their international bonds are 100% hedged to the NZ Dollar, while international shares are ~65% hedged.
  • InvestNow Foundation Series Growth Fund – Invests in NZ and Australian shares (26%), international shares (54%), bonds (18%), and cash (2%). Their international bonds are 100% hedged to the NZ Dollar, while international shares are unhedged.
  • Simplicity Growth Fund – Invests in NZ and Australian shares (29.5%), international shares (48.5%), bonds (20%), and cash (2%). Their international bonds are 100% hedged to the NZ Dollar, while their international shares are 65% hedged.
FundFeeAllocation to
shares
Allocation to
bonds
/cash
SuperLife
Growth
0.51%80%20%
InvestNow FS
Growth
0.37%80%20%
Simplicity
Growth
0.31%78%22%

Balanced funds

Balanced funds invest around 60% into New Zealand and international shares, and around 40% into bonds. They offer moderate potential returns, with moderate volatility:

  • SuperLife Balanced Fund – Invests in NZ and Australian shares (14%), international shares (36%), infrastructure and REITs (10%), bonds (28%), and cash (12%). Their international bonds are 100% hedged to the NZ Dollar, while their international shares are ~65% hedged.
  • InvestNow Foundation Series Balanced Fund – Invests in NZ and Australian shares (20%), international shares (40%), bonds (38%), and cash (2%). Their international bonds are 100% hedged to the NZ Dollar, while international shares are unhedged.
  • Simplicity Balanced Fund – Invests in NZ and Australian shares (21%), international shares (35%), bonds (42%), and cash (2%). Their international bonds are 100% hedged to the NZ Dollar, while their international shares are 65% hedged.
FundFeeAllocation to
shares
Allocation to
bonds
/cash
SuperLife
Balanced
0.50%60%40%
InvestNow FS
Balanced
0.37%60%40%
Simplicity
Balanced
0.31%56%44%

Conservative funds

Conservative funds invest around 20% into New Zealand and international shares, and around 80% into bonds. They offer lower potential for returns, but are relatively stable, so are better suited for short-term investors:

  • SuperLife Conservative Fund – Invests in NZ and Australian shares (5%), international shares (15%), infrastructure and REITs (10%), bonds (49%), and cash (21%). Their international bonds are 100% hedged to the NZ Dollar, while international shares are ~65% hedged.
  • Simplicity Conservative Fund – Invests in NZ and Australian shares (9.5%), international shares (12.5%), bonds (76%), and cash (2%). Their international bonds are 100% hedged to the NZ Dollar, while their international shares are 65% hedged.
  • SuperLife Income Fund – The Invests in bonds (70%), and cash (30%). Their international bonds are 100% hedged to the NZ Dollar.
FundFeeAllocation to
shares
Allocation to
bond
s/cash
SuperLife
Conservative
0.47%30%70%
Simplicity
Conservative
0.31%22%78%
SuperLife
Income
0.46%0%100%

Further Reading:
InvestNow Foundation Series vs Simplicity funds – Tax leakage an issue?

Where to invest

Each index fund provider has different methods for investing into their funds. Here’s a quick overview of each:

Smartshares

There’s a few options for investing in Smartshares’ funds:

  • Through Investnow, who don’t charge transaction fees to buy and sell their funds. Their minimum investment is $50.
  • Though a NZX broker like Sharesies or ASB Securities (Given Smartshares funds are ETFs listed on the NZX). However, you’ll pay brokerage fees for this.
  • Direct through Smartshares. However, the limitations of this method are that they only process transactions once per month, and that they don’t allow you to sell your funds through them. Instead you’ll have to sell your investment through a NZX broker.
  • Most of Smartshares’ funds are also available through SuperLife, though the SuperLife version of Smartshares’ funds have slightly different management fees and slightly different tax treatment (SuperLife’s funds are Multi-Rate PIEs, while Smartshares’s ETFs are Listed-PIEs).

Kernel

Kernel’s funds are available directly through Kernel. Their minimum investment is $1 per fund. They charge an account fee of $5 per month ($60 per year) for those investing over $25,000.

Macquarie

Macquarie’s index funds are available through the InvestNow platform. The All Country Global Shares Index Fund is also available through Sharesies.

Harbour

Harbour’s NZ Index Shares Fund is also available through the InvestNow platform.

Simplicity

Simplicity’s funds are available direct through Simplicity. They have a minimum investment requirement of $1,000.

SuperLife

SuperLife’s funds are available direct through SuperLife. Their minimum investment is $1 and they charge investors an admin fee of $12 per year.

Vanguard

The two Vanguard funds mentioned in this article are available through the InvestNow platform. Despite being foreign domiciled funds, InvestNow absorbs any foreign exchange fees associated with buying into and selling these funds.

Further Reading:
InvestNow review – The most efficient way to invest?
Kernel review – High quality index funds
Smartshares & SuperLife review – The smart way to invest in shares?


KiwiSaver

You can also invest in many of the index funds mentioned in this article as part of a KiwiSaver scheme:

Further Reading:
The ultimate guide to KiwiSaver funds and schemes
Build your own KiwiSaver – InvestNow vs SuperLife vs Craigs


Overseas domiciled index funds

This article mostly covered NZ domiciled index funds only. But another option for Kiwis to invest is using overseas domiciled funds (like Vanguard, iShares, and BetaShares funds listed in the US or Australia) through platforms like Sharesies or Hatch. These funds provide heaps more variety, and often come with cheaper management fees. However, they work slightly differently to NZ domiciled funds:

  • Despite their lower management fees, they attract additional fees like brokerage fees and foreign exchange costs, which might make them more expensive than local funds overall.
  • They’re taxed under the FIF regime, which may make tax compliance more difficult and costly. Versus local funds which are PIEs and have their tax taken care of by the fund manager.
  • They don’t have options that are hedged to the NZ Dollar. This is fine for shares, but may be problematic for bond funds. Given bonds are typically used to reduce portfolio volatility and for shorter-term investment, the exchange rate volatility introduced by using overseas funds isn’t ideal.

For more info on how foreign funds differ from locally domiciled ones, check out the below article which compares a local S&P 500 index fund with a US domiciled one:

Further Reading:
Smartshares US 500 (USF) vs Vanguard S&P 500 (VOO) – Which ETF is better?

Conclusion

In this article we covered 65 different index funds. These could fit into 6 broad categories:

  1. NZ funds – Invests in NZ shares, for broad exposure to domestic shares.
  2. Global funds – Invests in shares from around the whole world, for broad exposure to international shares.
  3. Regional funds – Invests in shares from specific countries or regions. Useful for increasing your portfolio’s exposure to a certain country/region.
  4. Sector & thematic funds – Invests in shares relating to specific sectors or themes. Useful for increasing your portfolio’s exposure to a sector/theme.
  5. Bond funds – Invests in bonds. Ideal for reducing risk in your portfolio, or for shorter-term investors.
  6. Diversified funds – An all-in-one type fund containing a mix of NZ shares, international shares, and bonds. Ideal as a simple starting point for an investment portfolio.

As for what you should invest in, there’s no one-size-fits-all way to go about it, nor is there a “right” or “wrong” number of funds you should invest in. But the approach we’ve personally used is to use NZ and Global funds as the “core” of our portfolios, then add small investments into regional or sector & thematic funds as “satellite” investments. Alternatively, we also like the idea of using diversified funds for their simplicity.

However, the approach you should take will come down to your own preferences, investment goals, and risk tolerance. Check out the below articles for more info on how to choose what to invest in, and how you might go about putting together an investment portfolio.

Further Reading:
How to invest $1k/$10k/$100k in New Zealand
6 ways to build a long-term investment portfolio in New Zealand


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Disclaimer

The content of this article is based on Money King NZ’s opinion and should not be considered financial advice. The information should never be used without first assessing your own personal and financial situation, and conducting your own research. You may wish to consult with an authorised financial adviser before making any investment decisions.

Comments

  1. Hi MoneyKingNZ. Could you please double check the number of countries in the Vanguard funds. It’s actually 23 (rather than 15).

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