International ETFs give NZ investors exposure to the world’s largest companies across the US, Europe, Japan, and other markets. But the way you access them in NZ matters significantly — due to FIF tax, platform costs, and currency effects.
NZ investors have two paths to international ETFs: NZ-listed Smart ETFs (formerly branded Smartshares; PIE funds, no FIF, roughly 0.20%–0.59% fee) or US-listed ETFs via Hatch/Stake/Tiger (0.03%–0.07% fee, but FIF tax above $50,000 effectively adds ~1.5%+ cost). Above the FIF threshold, NZ-listed ETFs and equivalent PIE managed funds (such as InvestNow's and Kernel's) often cost less in total.
Path 1 — NZ-Listed ETFs (Smart, formerly Smartshares, via NZX)
Smart (renamed from Smartshares in September 2024) offers NZX-listed ETFs covering global markets. These are PIE funds — no FIF, taxed at PIR (max 28%).
| ETF | Index | Fee | Markets |
|---|---|---|---|
| TWF (Total World ETF) | FTSE Global All Cap | 0.40% | Global (developed + emerging) |
| USF (US 500 ETF) | S&P 500 | 0.34% | US large cap |
| AUS (Australian Top 200 ETF) | S&P/ASX 200 | 0.30% | Australia |
| EMF (Emerging Markets ETF) | FTSE Emerging Markets All Cap | 0.59% | Emerging markets |
| ESG (Global ESG ETF) | MSCI World ex-Australia Custom ESG Leaders | 0.54% | Global, ESG-screened |
How to buy: Any NZX broker — Sharesies ($1 minimum, 1.9% brokerage capped at $25 NZD per order), Tiger Brokers, Jarden Direct.
Breadth vs cost: Of the Smart ETFs above, TWF (Total World ETF, 0.40%) has the broadest diversification (developed + emerging + small-cap, FTSE Global All Cap). USF (US 500, 0.34%) costs less but is US-only.
Path 2 — US-Listed ETFs via Hatch, Stake, or Tiger
US ETFs are the original index funds — extremely low expense ratios (0.03% for VOO) and deep liquidity. But for NZ investors, the total cost picture is different.
| ETF | What it tracks | Expense ratio | Available on |
|---|---|---|---|
| VOO (Vanguard S&P 500 ETF) | S&P 500 | 0.03% | Hatch, Stake, Tiger |
| IVV (iShares Core S&P 500 ETF) | S&P 500 | 0.03% | Hatch, Stake, Tiger |
| VTI (Vanguard Total Stock Market) | All US stocks | 0.03% | Hatch, Stake, Tiger |
| VT (Vanguard Total World Stock) | MSCI ACWI | 0.07% | Hatch, Stake, Tiger |
| QQQ (Invesco Nasdaq-100 ETF) | Nasdaq 100 | 0.20% | Hatch, Stake, Tiger |
| VXUS (Vanguard Total International) | Ex-US global | 0.07% | Hatch, Stake, Tiger |
NZ-specific costs of US ETFs
| Cost | Hatch | Stake | Tiger Brokers |
|---|---|---|---|
| FX (NZD→USD) | ~0.50% | 0.70% (deposit) | ~0.20% |
| Brokerage | $3/trade | $3/trade | from USD$1.99 |
| FIF tax (above $50k) | ~1.5–2% effective | ~1.5–2% effective | ~1.5–2% effective |
| PIE status | No | No | No |
| Tax on dividends | Marginal rate | Marginal rate | Marginal rate |
The FIF tax problem: Once your total overseas share portfolio (direct purchases) exceeds NZD $50,000, you pay FIF tax. At the FDR method (5% of opening value taxed at marginal rate), a 33% marginal rate investor pays approximately 1.65% annually just in FIF tax — dwarfing the 0.03% VOO expense ratio advantage.
→ See: FIF Tax NZ — Full Guide
Total Cost Comparison: NZ vs US ETF
$100,000 portfolio, 33% marginal tax rate, 5-year hold:
| Option | Fund fee | Platform/brokerage fee | FIF/tax | FX (annualised) | Total annual cost |
|---|---|---|---|---|---|
| InvestNow Foundation Series Total World Fund (0.06%) | 0.06% | $0 | $0 | $0 | 0.06% = $60, plus a 0.50% buy/sell transaction fee on each contribution |
| Kernel High Growth (0.25%) | 0.25% | $0 | $0 | $0 | 0.25% = $250 |
| Smart TWF via Sharesies | 0.40% | $0 ongoing (1.9% brokerage per trade, capped at $25 NZD, one-off on purchase) | $0 | $0 | ~0.40% = $400/year, plus a small one-off brokerage cost |
| VOO via Hatch | 0.03% | $0 | 1.65% | 0.10% | 1.78% = $1,780 |
| VOO via Tiger | 0.03% | $0 | 1.65% | 0.04% | 1.72% = $1,720 |
The 0.03% expense ratio of VOO doesn’t matter when FIF adds 1.65%. PIE fund alternatives win clearly above $50,000.
Below $50,000: FIF doesn’t apply. But even then:
- US ETF dividends taxed at marginal rate (vs PIR max 28% for PIE funds)
- FX costs on purchase and sale
- NZ PIE funds can cost the same or less in total, depending on your marginal rate
When US ETFs Are Appropriate for NZ Investors
Despite the FIF issue, direct US ETFs make sense for some NZ investors:
US citizens living in NZ: US tax rules create a different calculation. US persons are taxed by the IRS on worldwide income — NZ PIE funds are not IRS-transparent. US persons in NZ typically prefer US-listed ETFs for compliance reasons.
Portfolio under $50,000 with a high-income investor: Below FIF threshold + marginal rate close to 28% PIR rate = smaller advantage for PIE funds. Still not clearly better than a NZ PIE fund, but closer.
Sophisticated investors wanting specific exposures: If you want VGT (Vanguard Information Technology ETF) or SCHD (Schwab US Dividend Equity) specifically, there’s no NZ PIE fund equivalent. NZ Smart (formerly Smartshares) ETFs cover broad indices but not sector/thematic US ETFs.
International ETF Options by Exposure
| Exposure | Example available in NZ | Fee |
|---|---|---|
| Broadest global exposure (managed fund) | Foundation Series Total World Fund (InvestNow) | 0.06% |
| Broadest global exposure (ETF) | Smart TWF (formerly Smartshares) | 0.40% |
| S&P 500 exposure (PIE) | Kernel S&P 500 Fund | 0.25% |
| S&P 500 via NZX | Smart USF (formerly Smartshares) | 0.34% |
| Emerging markets | Smart EMF (formerly Smartshares) | 0.59% |
| Australian exposure | Smart AUS: Australian Top 200 ETF (formerly Smartshares) | 0.30% |
| Direct US ETF (under $50k) | VOO via Tiger Brokers | 0.03% + costs |
Where to check the latest data
Rates, fees and returns change often. Before deciding, check current figures yourself:
- Sorted Smart Investor: compares fees, returns and risk levels of KiwiSaver and managed funds.
- Disclose register: holds each fund's product disclosure statement and quarterly fund updates.
- Financial Service Providers Register: shows whether a provider is registered to offer financial services in New Zealand.
- The provider's own website: has its current rates, fees and full terms; these change more often than any comparison page.
Frequently Asked Questions
Can I buy Vanguard ETFs directly in NZ? Vanguard doesn’t operate a direct retail platform in NZ. You access Vanguard funds via InvestNow (several of its Foundation Series funds invest into Vanguard ETFs, and it also lists a Vanguard index fund) or by buying Vanguard ETFs (VOO, VTI, VT) via Hatch, Stake, or Tiger Brokers. You cannot open a direct Vanguard account as a NZ resident.
Are Smart (formerly Smartshares) ETFs as good as Vanguard ETFs? Smart’s ETFs (Smartshares rebranded to Smart in September 2024) are NZ-domiciled PIE funds that invest in similar underlying indices to Vanguard ETFs, though not always the identical index (for example, Smart’s TWF tracks the FTSE Global All Cap Index rather than a Vanguard-specific benchmark). The fund fee is higher (roughly 0.20%–0.59% vs 0.03%–0.07% for the US-listed Vanguard equivalents), but the PIE tax treatment means the total cost is often lower for NZ investors, particularly above $50,000.
What is the best ETF for NZ investors? That depends on the exposure you want, your balance relative to the FIF threshold, and fees. Among the options on this page, the Foundation Series Total World Fund (InvestNow, 0.06%) has the lowest fee for broad global exposure; it and the Simplicity Growth Fund (0.23%, no member fee) are managed funds rather than ETFs but work similarly. On the NZX, Smart TWF (0.40%, formerly Smartshares) has the broadest global exposure.