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

InvestNow, Sharesies, Simplicty, Vanguard, SuperLife, Smartshares, and Hatch. 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 it is often 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 to invest in. But if you dig deeper, they are actually all quite different things, offering unique services and working in different ways:

  • InvestNow and Sharesies are what I call Fund Platforms
  • Simplicity, Vanguard, and SuperLife are Fund Managers
  • Smartshares is an Exchange Traded Fund (ETF) issuer. Vanguard also issues ETFs, but sadly not in the NZ market
  • Hatch is what I call a Brokers (or Broker-like service). Sharesies is also a broker

Below I’ll be explaining 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 July 2019) – Sharesies is now included in the brokers section, as they have released the ability to buy and sell shares listed on the NZX.

Fund Platforms

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

Fund Platforms are a good option for everyone – both beginners and experts – as they allow you to invest in lots of different funds in one place. They have low minimum investment amounts, making investing very accessible to ordinary people. Fund Platforms also provide investors with good online portals, allowing you to buy, sell, and view your investments at anytime and anywhere.

InvestNow

InvestNow logo
Minimum investment$50
Fees$0

InvestNow offers over 100 funds on its platform, from 20 fund managers/issuers including AMP, Smartshares, and Vanguard. They don’t charge any 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$1
FeesBased on the size of your portfolio:
$0 for under $50
$1.5/month between $50 and $3,000
$3/month for over $3,000
OR $30 per year

The trendy Sharesies platform offers around 30 funds – comprising mainly of Smartshares ETFs and a few socially responsible funds. Their ultra low minimum investment amount opens up the opportunity to start investing for almost anyone. Sharesies is known for having a simple, beginner-friendly user interface, however, this nice online portal doesn’t become cheap – they charge investors a monthly account fee if your account value is over $50.

If you’re keen to start building your investment portfolio with Sharesies, you can sign up with this link, and I’ll get $5 in my own Sharesies account. A great way to show your support for this site!

Fund Managers

Fund Managers are the people who actually provide and manage the funds you invest in, taking your money and putting 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 administration fee.

There are heaps of Fund Managers out there, and they tend to require a few thousand dollars as a minimum investment if you invest in a fund directly through them. However, a lot of managers offer their funds on platforms like InvestNow and Sharesies, where the minimum investment amount is lower. Most New Zealand Fund Managers also offer KiwiSaver funds, but I won’t cover these here.

Simplicity

Simplicity logo
Minimum investment$5,000
Fees0.1% – 0.31%
Plus $30 per year

Simplicity is an attractive choice among investors because of their super low fees. Simplicity has five different fund options (Conservative, Balanced, Growth, NZ Share, NZ Bond). However, the minimum investment is high at $5,000, and their funds aren’t available on InvestNow or Sharesies, making Simplicity a much less accessible investment option. Also be careful of their $30 annual fee – with $5,000 invested, that $30 fee equates to 0.6% which is quite high compared to other investment options.

Vanguard

Vanguard logo
Minimum investment$500,000 directly via Vanguard
or $50 via InvestNow
Fees0.20% unhedged
0.26% NZD hedged

Vanguard currently has two global share funds (Vanguard International Shares Select Exclusions Index Fund – NZD Hedged/Unhedged) accessible in the New Zealand market, and they are investor favourites, again due to their very low management fee. Don’t be scared off by the $500,000 minimum investment amount because thanks to InvestNow, you can invest with only $50.

Just be aware that these are Australian domiciled funds, so are considered Foreign Investment Funds. This may introduce additional tax implications to you.

Overseas, Vanguard has a much more comprehensive offering, with over $5 trillion under management across a huge range of funds and ETFs.

SuperLife

SuperLife logo
Minimum investment$1
Fees0.44% – 0.63%
Plus $12 per year

SuperLife offers 44 funds, investing almost entirely into Smartshares ETFs (e.g. the NZ Top 50 Fund invests exclusively in the Smartshares NZ Top 50 ETF). Even more confusing, is that sometimes SuperLife’s fund management fee differs from its Smartshares ETF equivalent e.g:

Because SuperLife’s online portal is relatively poor, and their offering mirrors Smartshares so closely, it is probably easier to stick with buying the equivalent Smartshares ETF from InvestNow or Sharesies. That is unless:

  • The fund offered on SuperLife has cheaper management fees than the Smartshares ETF equivalent AND you are investing enough money to make the management fee savings cover the $12 annual fee e.g. you need to invest over $4,616 in the SuperLife Aussie Mid Cap Fund for it to work out cheaper than investing in the Smartshares ETF equivalent.
  • The Smartshares ETF you want is not offered on InvestNow or Sharesies e.g. the US Small Cap ETF.

Other fund managers

  • Your bank – New Zealand’s big banks all offer their own funds, but they tend to charge high management fees.
  • AMP – Offer popular, low-fee index funds (Global Shares Index, Global Fixed Interest Index, NZ Shares Index, Australasian Property Index) accessible through InvestNow.
  • Kernel – A new fund manager offering three funds that invest in the New Zealand sharemarket. Kernel‘s fees are competitive but a little more expensive than alternatives like Simplicity and AMP.
  • Heaps more – Devon, PIE Funds, Milford, and Pathfinder are examples of Fund Managers offering funds on InvestNow.

ETF Issuers

ETF Issuers are pretty similar to Fund Managers. ETF stands for Exchange Traded Fund, and they work the same as normal funds, apart from the key difference being that ETFs are listed and tradable on an exchange (i.e. a sharemarket).

This difference less important these days, because with Fund Platforms like InvestNow and Sharesies, you no longer have to go through the sharemarket to access ETFs. However, buying and selling ETFs on the sharemarket is much more prevalent in countries like Australia where brokerage fees are cheaper, and the ETF selection is much greater.

Smartshares

Smartshares logo
Minimum investment$500
FeesBetween 0.3% – 0.75% management fee
$30 one-off fee, if buying directly from Smartshares

Smartshares is the dominant ETF issuer in NZ with over 30 ETFs, and are owned by the operator of NZ’s sharemarket, NZX. Interestingly, their non-Australasian ETFs simply invest in Vanguard and Blackrock ETFs, so they are really ETFs within an ETF!

You can buy Smartshares ETFs from the NZ sharemarket through a broker, or directly from Smartshares (note – ETFs bought directly from Smartshares must be sold via a broker). In addition, a large collection of Smartshares ETFs can be found on InvestNow and Sharesies – which is probably the easier way to invest in these ETFs due to their lower fees and superior online portals.

Other ETF Issuers

Unfortunately these ETF issuers don’t offer anything in the New Zealand market. But that’s where brokers come in (see below section).

  • Blackrock – the world’s largest ETF issuer under the iShares brand
  • Vanguard – the world’s 2nd largest ETF issuer
  • Betashares – an Australian ETF issuer

Brokers

Brokers allow you to buy and sell shares in individual companies on the sharemarket. 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).

Brokers are probably more 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.

Hatch

Hatch logo
Minimum investment$1
Fees50bps on NZD-USD currency exchange
$3 per trade of fractional shares
$8+ per trade of whole shares
Full details on Hatch fees here

Hatch is a service that allows you to buy and sell shares and ETFs from the United States sharemarkets. This gives you access to the dirt cheap Vanguard and Blackrock ETFs, as well as individual companies like Apple, Facebook, Netflix, and Tesla. However, you must change your NZD to USD before buying anything through Hatch, and to do this they’ll charge you a 50bps fee on the exchange rate. When withdrawing your investment you’ll need to change the USD back to NZD, costing you another 50bps on the exchange rate.

Another thing to be aware of is that Hatch is not a true broker, as they do not allow you to trade directly on the sharemarket. Instead, trades are done through DriveWealth, a platform which holds your shares and ETFs on your behalf.

Sharesies

Sharesies logo
Minimum investment$1
FeesAccount fee based on the size of your portfolio:
$0 for under $50
$1.5/month between $50 and $3,000
$3/month for over $3,000
OR $30 per year
Plus a brokerage fee of:
0.5% for orders up to $3,000
+0.1% for amounts above $3,000

It’s Sharesies again. In addition to being a Fund Platform, they provide a brokerage service for shares listed on the NZX, New Zealand’s sharemarket. Brokerage is cheap (compared to other NZX options), 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. See my full comparison between Sharesies and ASB Securities/Direct Broking here.

If you’re keen to start building your investment portfolio with Sharesies, you can sign up with this link, and I’ll get $5 in my own Sharesies account. A great way to show your support for this site!

Other Brokers

  • Direct Broking, ASB Securities – Brokers for shares and ETFs on the NZ and Aussie sharemarket.
  • Stake – Identical service to Hatch, for Australians. Stake is planning to launch in New Zealand soon.

Conclusion

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

  • Fund Platforms: Suitable for everyone, as they provide easy online access to many funds at a low minimum investment amount. A great way to build a “set and forget” investment portfolio.
  • Fund Managers: Suitable if you have a large amount to invest and want to invest in a specific fund.
  • ETF Issuers: Suitable for everyone, but it’s often easier to buy ETFs from a Fund Platform, as they offer better user interfaces and lower fees.
  • Brokers: Suitable for intermediate or expert investors who want to invest in a specific company, or an ETF from overseas. Fantastic for hands-on investors.
The complex world of investment services

Further reading:

Found this article helpful? Please share, and Follow or Subscribe to keep up with the latest news and posts!


More articles



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 a qualified financial advisor before making any investment decisions.