Fees are the only certain cost in investing. Returns are uncertain; fees are guaranteed. Understanding what you’re paying — and how it compounds over time — is one of the highest-value things a NZ investor can do.
A 1 percentage point annual fee difference on a $100,000 portfolio costs you roughly $70,000 over 20 years in lost compounding. NZ index funds typically charge 0.1–0.5% p.a. Aim to keep your total fee below 0.5% p.a. for passive investing. Compare the Total Cost of Ownership (fund fee + platform fee) — not just one or the other.
Types of Investment Fees in NZ
1. Management Fee (or Total Management and Administration Fee / TMAF)
The annual percentage charged by the fund manager to run the fund. This is deducted from the fund’s assets daily — you never see it as a direct charge, but it reduces your unit value.
Typical range in NZ:
- Passive index funds: 0.07% – 0.50% p.a.
- Actively managed funds: 0.75% – 1.50% p.a.
- KiwiSaver funds: 0.20% – 1.50% p.a.
2. Platform Fee
Some platforms charge a separate annual fee for access to their investment services, on top of the underlying fund fee.
Platforms are listed alphabetically.
| Platform | Fee structure |
|---|---|
| InvestNow | No platform fee; fund manager fees only |
| Kernel | No platform fee; fund management fee only (from 0.25% p.a.) |
| Sharesies | No compulsory platform fee. Pay-as-you-go (1.9% brokerage, capped per market) or an optional $3/$7/$15 monthly plan that covers more brokerage-free buying/auto-invest; advised portfolios carry a separate ~0.20% p.a. portfolio fee |
| Simplicity | 0.23% p.a. management fee (diversified funds, from 1 October 2026); no separate platform fee |
| Smart (formerly Smartshares) | $0 platform fee; fund fees only via NZX |
3. Transaction Fees (Brokerage)
Fees charged when you buy or sell investments. More relevant to share trading than regular fund investing.
| Platform | Transaction fee |
|---|---|
| Hatch | US/AU stocks: $3 per trade |
| Interactive Brokers | US stocks: USD$0.005 per share (min USD$1) |
| Sharesies | 1.9% transaction fee, capped per market (NZ: max $25 above ~$1,316; AU: max $15; US: max $5) |
| Stake | US stocks: $3 per trade |
| Tiger Brokers | NZX: 0.1% (min $2); US stocks: from USD$1.99 per trade |
For regular index fund investing via auto-invest, transaction fees are usually $0 or minimal.
4. Foreign Exchange (FX) Fee
Charged when your investment involves currency conversion (NZD → USD for US shares).
- Hatch: 0.5% FX fee
- Interactive Brokers: ~0.002%
- Sharesies: 0.4% FX fee
- Stake: 0.7% FX fee on deposits; no conversion fee on trades (USD wallet)
FX fees matter more for frequent US stock traders than for buy-and-hold index fund investors.
5. Performance Fees
Some actively managed funds charge a performance fee on top of the base management fee — typically 10–20% of returns above a benchmark.
Very few passive NZ index funds charge performance fees. Actively managed funds (Milford, Fisher Funds) may. Check the Product Disclosure Statement (PDS).
The Compounding Cost of Fees
This is the most important number to understand. Fees compound against you at the same mathematical rate as returns compound for you.
Example: $100,000 invested for 20 years at 8% gross return
| Annual fee | Portfolio value after 20 years |
|---|---|
| 0.10% | $454,000 |
| 0.50% | $424,000 |
| 1.00% | $386,000 |
| 1.50% | $352,000 |
The difference between 0.10% and 1.50% is $102,000 on a $100,000 starting investment over 20 years — more than the original investment itself.
Total Cost of Ownership: The Right Way to Compare
Don’t compare platform fees or fund fees in isolation — calculate the total annual cost as a percentage of your investment.
Example: $20,000 in a low-cost fund, by platform
Each platform offers a different set of funds (InvestNow’s own Foundation Series funds, for example, aren’t available through Sharesies). This illustrates why you need to think about the full stack:
| Platform + Fund | Platform fee | Fund fee | Total cost |
|---|---|---|---|
| Sharesies + Sharesies advised Growth Portfolio | 0.20% | 0.49% | ~0.69% |
| InvestNow + Vanguard International Shares | 0% | 0.20% | 0.20% |
| Kernel + Kernel Global 100 Fund | 0% | 0.25% | 0.25% |
| Simplicity | 0% | 0.23% | 0.23% |
| KiwiSaver: Milford Active Growth | ~0% (KS) | 1.05% | 1.05% |
| KiwiSaver: Simplicity Growth | ~0% (KS) | 0.23% | 0.23% |
Approximate figures — always check current PDS.
Fund Fees for Common NZ Funds (2026)
| Fund | Type | Annual fee |
|---|---|---|
| InvestNow Foundation Series Total World Fund | Index | 0.06% (plus 0.50% buy/sell fee) |
| InvestNow Foundation Series Balanced Fund | Diversified | 0.37% |
| Kernel Global 100 Fund | Index | 0.25% |
| Kernel NZ 20 Fund | Index | 0.25% |
| Smart US 500 ETF (USF) | Index | 0.34% |
| Smart NZ Top 50 ETF (FNZ) | Index | 0.50% |
| Simplicity Growth Fund | Index-like | 0.23% |
| Simplicity Balanced Fund | Index-like | 0.23% |
| Milford Active Growth | Active | 1.05% |
| Fisher Funds TWO Growth | Active | 1.06% |
Are Active Funds Ever Worth Higher Fees?
Active funds charge more because fund managers make investment decisions, rather than tracking an index. The question is whether they consistently outperform enough to justify the fee gap.
The evidence from NZ and globally is mixed at best. Morningstar’s annual NZ active vs passive comparison typically shows:
- Most active managers underperform their benchmark after fees over 10+ year periods
- A small number consistently outperform
- Past outperformance doesn’t guarantee future outperformance
Rule of thumb: If you pay a 1% higher fee for an active fund, that fund needs to consistently outperform its benchmark by more than 1% p.a. after fees. Most don’t.
Fee Red Flags to Watch For
- Performance fees with soft benchmarks — e.g. “20% of returns above cash rate” when cash rate is near zero
- Entry/exit fees — largely gone from mainstream NZ funds but still exist in some
- Hidden FX fees — not always prominently disclosed; check the PDS
- Wrap platform fees on top of already-expensive funds — stacking fees on fees
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
Are fees taken out of my returns or charged separately? Management fees are deducted from the fund’s assets daily (as a fraction of the daily rate). You never see them as a direct charge — they reduce the unit price. Transaction fees and some platform fees may be charged directly.
Do NZ ETFs listed on the NZX have brokerage? Yes — Smart ETFs (formerly Smartshares; USF, FNZ, AUS, etc.) incur normal NZX brokerage when bought through a broker. If you invest via the Smart regular investment plan, there’s no brokerage on automated contributions.
Next Steps
- Investing Platforms NZ 2026 Compared: total costs across platforms
- PIR Rate NZ — The tax rate that affects your after-fee returns
- InvestNow Review NZ 2026 — No platform fee; very low fund fees
- Kernel Review NZ 2026 — Flat-fee model for larger balances
- Back to Getting Started