What’s the difference between InvestNow, Sharesies, Simplicity, Hatch, and more?

InvestNow, Sharesies, Simplicty, Smartshares, Kernel, Hatch, and ASB Securities. Whether you’ve been investing for a while, or you’re new, you’ve probably heard of these popular New Zealand investment services. They are all fantastic options for Kiwis wanting to invest, but having so much choice can make it difficult and confusing for investors to decide which one to sign up for and use.

On the surface, they all have one thing in common – they all provide you with access to funds and shares to invest in. But if you dig deeper, they are actually all quite different things, offering unique services and working in different ways:

  • Simplicity, Smartshares, and Kernel are what I’ll call “Fund Managers”
  • InvestNow and Sharesies are what I’ll call “Fund Platforms”
  • Hatch and ASB Securities are what I’ll call “Brokers”. Sharesies is also a broker

In this article I’ll be giving an overview of what each of these services do and offer, as well as giving a brief mention of the fees, minimum investment amount, and who they’re suitable for.

Update (15 March 2021) – Article updated and rewritten for 2021.

Update (17 April 2021)New Sharesies fee structure effective from 29 April 2021

1. Fund Managers

Fund Managers are companies who offer and manage funds – taking your money and investing it into assets like shares and bonds. For doing so, they charge investors a management fee which is a small percentage of the amount you have invested. Some Fund Managers also charge a fixed monthly or yearly account fee.

Funds normally come in one of two types:

  • Listed funds (ETFs) – More commonly known as Exchange Traded Funds (ETFs), listed funds are listed on an exchange (like the NZX) – so they can be bought or sold off the market through a broker, as well as through the Fund Manager itself.
  • Unlisted funds – These funds aren’t listed on an exchange. To buy or sell them, you must go directly through the Fund Manager.

Many New Zealand Fund Managers also offer KiwiSaver funds, but I won’t cover these here.

Simplicity

Simplicity logo
Minimum investment$1,000
Fees0.1% – 0.31%
Plus a $20 per year account fee

Simplicity is an attractive choice among investors because of their low fees and simple selection of investment options. Simplicity has five different unlisted fund options (Conservative, Balanced, Growth, NZ Share, NZ Bond). However, the minimum investment is high at $1,000 making Simplicity a much less accessible investment option. Also be careful of their $20 annual fee – with $1,000 invested, that $20 fee equates to 2% which is quite high compared to other investment options.

Smartshares

Smartshares logo
Minimum investment$500
FeesBetween 0.2% – 0.75% management fee
$30 one-off fee, if buying directly from Smartshares

Smartshares offers over 30 ETFs listed on the New Zealand sharemarket. Their broad selection covers everything from domestic New Zealand shares, to international shares, bonds, and cash. Their main downside is that you can’t sell your investments through Smartshares – instead any ETFs you buy through them have to be sold through a broker such as ASB Securities or Jarden Direct.

Kernel

Minimum investment$500
Fees0.29% – 0.55%
Plus $3 per month account fee, for account balances over $1,000

Kernel offers 8 unlisted index funds. Being a relatively new fund manager, they are steadily growing with a quality selection of funds, including New Zealand’s first electric vehicle fund.

Other fund managers

  • SuperLife – Offers 44 unlisted funds, investing almost entirely into Smartshares ETFs (e.g. the SuperLife NZ Top 50 Fund invests exclusively in the Smartshares NZ Top 50 ETF)
  • Your bank – New Zealand’s big banks all offer their own investment funds, but they tend to charge relatively high management fees.
  • Heaps more – Devon, PIE Funds, Milford, and Pathfinder are well known fund managers in New Zealand.

2. Fund Platforms

Fund Platforms are services that offer you access to a variety of different funds to invest in, from different fund managers. They are sometimes described as a “Fund Supermarket”. Fund Platforms do not manage your funds – instead they act as a “middleman” between investors and Fund Managers.

So why would you consider investing through a Fund Platform, rather than directly through the Fund Manager? Fund Platforms can offer the following benefits:

  • They allow you to invest in lots of funds from different fund managers under one roof.
  • They often have lower minimum investment amounts. For example, the minimum investment on InvestNow is $50 (much lower compared to investing through Smartshares which has a $500 minimum).
  • Fund Platforms also provide investors with good online portals, allowing you to buy, sell, and view your investments at anytime and anywhere.

However, some Fund Managers choose not to list their funds on a Fund Platform. For example, Simplicity and Kernel do not offer their funds on InvestNow or Sharesies.

InvestNow

InvestNow logo
Minimum investment$50
Fees$0

InvestNow offers over 120 funds on its platform, from 20 Fund Managers/issuers including Smartshares, Milford, ANZ, and Vanguard. They don’t charge any account fees, making it a frequently recommended choice for investors (they make money by charging Fund Managers to list their funds on the platform). However, InvestNow’s interface isn’t the most user-friendly – while that should be fine for knowledgable investors, beginners might find it overwhelming.

Sharesies

Sharesies logo
Minimum investment$0.01
FeesTransaction fee of:
0.5% on orders up to $3,000
+0.1% on any amounts above $3,000

The trendy Sharesies platform offers around 40 funds – comprising mainly of Smartshares ETFs and a few ethical funds. Their ultra low minimum investment amount of a single cent opens up the opportunity to start investing for almost anyone. Sharesies is known for having a simple, beginner-friendly user interface, however, watch out for transaction fees that they charge when you buy or sell any ETFs.

Keen to start building your investment portfolio with Sharesies? Sign up with this link, and you’ll get a bonus $5 in your account to invest!

Further Reading:
InvestNow vs Sharesies – Ultimate Fund Platform showdown and review
What happens to your money if InvestNow or Sharesies go bust?

3. Brokers

Brokers allow you to buy and sell shares in individual companies on the sharemarket. And because ETFs are listed on the sharemarket, you can also buy and sell ETFs through brokers. They charge brokerage fees whenever you make a trade (buy or sell something).

Each broker differs in the markets they offer access to:

NZXASXUS
SharesiesYesComing soonYes
HatchYes
ASB SecuritiesYesYesYes
Jarden DirectYesYesYes
StakeYes
ShareMeUpLimited

In my opinion, brokers are better suited to more experienced investors, as the large number of share and ETF offerings might be overwhelming for beginners, particularly if investing in the United States market. Plus investing in individual companies requires research to ensure you’re getting into a sound investment.

Sharesies

Sharesies logo
Minimum investment$1
FeesA transaction fee of:
0.5% for orders up to $3,000
+0.1% for amounts above $3,000
Plus a foreign exchange fee (to change between NZD, AUD, or USD if buying ASX or US shares/ETFs:
0.4%

In addition to being a Fund Platform, Sharesies provides a brokerage service for shares listed on the NZX (New Zealand’s sharemarket), and the US markets, with access to the ASX (Australia’s sharemarket) coming soon. Brokerage is cheap and they offer fractional shares, which means you can invest with any amount (compared to a minimum of ~$1,000 through other channels). However, unlike traditional brokers, any shares bought off Sharesies are not held directly in your name – instead they are held by a custodian on your behalf.

Keen to start building your investment portfolio with Sharesies? Sign up with this link, and you’ll get a bonus $5 in your account to invest!

Hatch

Hatch logo
Minimum investment$1
Fees0.5% on NZD-USD currency exchange
$3 USD per trade or $0.01 per share for trades over 300 shares

Hatch is another service that allows you to buy and sell shares and ETFs from the United States sharemarkets. This gives you access to the cheap Vanguard and Blackrock ETFs, as well as individual companies like Apple, Facebook, Netflix, and Tesla.

ASB Securities

Minimum investment$1,000
FeesBrokerage fee charged per buy/sell trade you make.
For NZX trades:
$15 for trades up to $1,000
$30 for trades between $1,000 and $10,000
0.3% for trades over $10,000

ASB Securities is a traditional broker allowing you to buy and sell shares in companies listed on the NZ sharemarket (NZX) and Australian sharemarket (ASX) (as well as the US market with very high fees). Their upfront brokerages fees are higher compared with Sharesies, but ASB does not charge an ongoing account fee. Also unlike Sharesies, shares bought through ASB can be held in your own name.

Other Brokers

  • Jarden Direct – Provides a similar service to ASB Securities, being a traditional broker offering shares and ETFs on the NZ and Aussie sharemarkets.
  • Stake – Similar service to Hatch, offering only US listed shares and ETFs.
  • ShareMeUp – Offers a limited number of shares listed on the NZ sharemarket.

Further Reading:
Buying shares on the NZX – Sharesies vs ASB Securities and Direct Broking

Conclusion

New Zealanders are spoilt for choice these days when it comes to investing options. So what kind of service should you use?

  • Fund Managers: Most suitable if you’re happy with a particular Fund Manager and the set of funds they offer.
  • Fund Platforms: Suitable for everyone, as they provide easy online access to many funds at a low minimum investment amount, and with low fees.
  • Brokers: Most suitable for intermediate or expert investors who want to invest in a specific company, or an ETF from overseas. Fantastic for hands-on investors.

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Disclaimer

The content of this article is based on my personal 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.