Index funds and ETFs (Exchange Traded Funds) are the backbone of modern low-cost investing. Instead of trying to pick winning stocks, you buy the whole market and capture its growth at minimal cost. This approach consistently outperforms most actively managed funds over the long run, after fees.
A common NZ approach is to invest monthly in one or two diversified index funds. Examples on NZ platforms include InvestNow Foundation Series funds (from very low fees) and Kernel Global 100 (0.25% p.a.); both are PIE funds, so tax is handled automatically at your PIR. Some investors add a NZ equities fund for local dividend exposure. Compare current fees and holdings on Sorted's Smart Investor.
What Is an Index Fund vs an ETF?
Index fund: A managed fund that tracks a market index (e.g., NZX 50 or S&P 500). You buy units, the manager invests to replicate the index. No NZX listing required — you transact directly with the fund.
ETF (Exchange Traded Fund): Also tracks an index, but is listed on a stock exchange. You buy and sell ETF units like shares, at market price throughout the trading day. In NZ, Smart (formerly Smartshares) lists ETFs on the NZX.
The practical difference for NZ investors:
- Smart (formerly Smartshares) ETFs are exchange-traded on NZX — buy via any NZX broker or Sharesies
- InvestNow and Kernel funds are managed funds — buy directly through their platforms, no brokerage cost
Both are low-cost passive vehicles. Managed funds (such as InvestNow’s and Kernel’s) allow regular automated investing without brokerage. ETFs (bought via an NZX broker or Sharesies) can be bought and sold during the trading day.
Providers are listed alphabetically.
InvestNow: Platform Overview
InvestNow is a NZ investment platform offering access to ~100 managed funds including low-cost index funds, actively managed funds, and term deposits.
Fee structure: No platform fee. You pay only the fund’s Management Expense Ratio (MER).
Key InvestNow Funds
| Fund | MER | Focus |
|---|---|---|
| Foundation Series Total World | 0.06% (plus 0.50% buy/sell fee) | Global shares incl. emerging markets; NZD-hedged version also available |
| Foundation Series Balanced / Growth / High Growth | 0.37% | Diversified NZ and international shares and bonds |
| Harbour T. Rowe Price Global Equity | ~0.85% | Active global equity |
| Pathfinder Global Responsibility | ~1.10% | Ethical/ESG global |
| AMP Global Fixed Interest | ~0.45% | Global bonds |
| Various Pie Funds | 0.49%–0.99% | Various NZ and global |
Foundation Series is InvestNow’s own fund range (10 funds as at October 2026): seven Core Equity Funds that each invest into an ETF, such as Vanguard’s Total World (VT) and S&P 500 (VOO) ETFs, and three Diversified Funds. There is no Foundation Series NZ-shares or bond fund.
Kernel: NZ Index Funds
Kernel is a NZ-founded investment platform. Minimum investment $1, no brokerage, all PIE funds.
Kernel Funds
| Fund | Fee | Focus |
|---|---|---|
| Kernel Global 100 | 0.25% | 100 largest global companies |
| Kernel S&P 500 | 0.25% | 500 largest US companies |
| Kernel NZ20 | 0.25% | NZ’s 20 largest companies |
| Kernel Cash Plus | 0.25% | Short-term interest-bearing and NZ fixed income assets (an investment fund, not a savings account) |
| Kernel High Growth | 0.25% | Aggressive multi-asset |
| Kernel Balanced | 0.25% | Moderate multi-asset |
Kernel charges 0.25% p.a. for most funds (up to 0.45% for specialty funds like Emerging Markets or Clean Energy) and offers auto-invest.
Simplicity: Index Funds with Ethical Exclusions
Simplicity is a NZ not-for-profit investment company offering KiwiSaver and standalone investment funds. It directs 15% of its KiwiSaver and investment fund management fees to the Simplicity Foundation, a charitable trust that is also its ultimate owner.
| Fund | Fee | Focus |
|---|---|---|
| Simplicity Growth | 0.23% | 90% shares, global index |
| Simplicity Balanced | 0.23% | 60% shares |
| Simplicity Conservative | 0.23% | 30% shares |
Simplicity applies an ethical screen, excluding tobacco, weapons, and gambling.
Smart (formerly Smartshares): NZX-Listed ETFs
Smart (formerly Smartshares, rebranded September/October 2024; NZX subsidiary) is NZ’s largest ETF provider. All Smart ETFs are listed on the NZX and can be purchased via any NZX broker or Sharesies.
Key Smart ETFs
| ETF (code) | Index tracked | Fee (MER) | Focus |
|---|---|---|---|
| NZ Top 50 (FNZ) | S&P/NZX 50 | 0.50% | NZ’s 50 largest listed companies |
| NZ Top 10 (TNZ) | NZX 10 | 0.60% | NZ’s 10 largest companies |
| Australian Top 200 (AUS) | S&P/ASX 200 | 0.30% | Australia’s 200 largest companies |
| US 500 (USF) | S&P 500 | 0.34% | 500 largest US companies |
| Total World (TWF) | FTSE Global All Cap | 0.40% | Thousands of companies globally |
| NZ Property (NPF) | NZX Real Estate | 0.54% | NZ-listed property funds (REITs) |
| Global Bond (GBF) | Bloomberg Global Aggregate | 0.54% | Investment-grade global bonds |
Smartshares rebranded to “Smart” in September/October 2024. The funds above are marketed as Smart ETFs, still issued by the same NZX-owned manager (Smartshares Limited, trading as Smart). The Australian fund (AUS) was widened from a 20-company to a 200-company index; check the current PDS before investing, as fund composition and fees are revised periodically.
Of the ETFs above, TWF (Total World) has the broadest diversification in a single ETF.
How Smart (formerly Smartshares) ETFs are bought
- Through NZX brokers such as ASB Securities, Jarden Direct, or Sharesies (with fractional shares)
- Direct from Smart (minimum $500 lump sum or $50/month regular plan)
Fees Matter More Than You Think
The difference between 0.20% and 1.20% in annual fees looks small. Over 30 years it’s enormous:
| Annual fee | $10,000 invested at 7% for 30 years |
|---|---|
| 0.20% | ~$73,000 |
| 0.50% | ~$67,000 |
| 1.00% | ~$58,000 |
| 1.50% | ~$49,000 |
The difference between 0.20% and 1.50% fees — $24,000 out of a $73,000 final balance — is enormous. Fees compound against you in the same way returns compound for you.
Building a Simple NZ Portfolio
These are illustrative structures, not recommendations; the funds named are examples of each building block.
One-fund structure:
- A global index fund, e.g. InvestNow Foundation Series Total World Fund (an NZD-hedged version is also available): covers thousands of global companies at very low cost
Two-fund structure:
- 80% global index fund (e.g. InvestNow Foundation Series Total World Fund)
- 20% NZ shares fund (e.g. Smart NZ Top 50, FNZ, formerly Smartshares): adds NZ dividend income and local exposure
Three-fund portfolio:
- 70% global index fund
- 20% NZ equities (NZX 50)
- 10% NZ/global bonds (for stability)
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
Which index funds are available in NZ, and how do their fees compare?
There is no single best index fund: it depends on what you want to hold, your time horizon, and fees. Low-fee options covered on this page include InvestNow Foundation Series funds (from 0.03% for the US 500 Fund to 0.37% for the diversified funds), Kernel Global 100 (0.25%), and Smart Total World ETF (0.40%, formerly Smartshares). In KiwiSaver, Simplicity Growth charges 0.23% (from 1 October 2026). Sorted’s Smart Investor compares funds by fee and type.
Is investing in ETFs safe in NZ?
ETFs are regulated by the Financial Markets Authority (FMA). Fund assets are held separately from the management company — if Smart (formerly Smartshares) or Kernel went under, your investments would still be intact. The risk is market risk (share prices falling), not provider failure.
What is the NZX 50?
The NZX 50 (New Zealand Stock Exchange 50) is an index of New Zealand’s 50 largest listed companies. It includes Meridian Energy, Fisher & Paykel Healthcare, Auckland Airport, Spark NZ, Infratil, Contact Energy, and others. The Smart NZ Top 50 ETF (FNZ, formerly Smartshares) tracks it.
Should I hedge my global investments to NZD?
Hedging means currency risk is neutralised: your global fund returns are reported in NZD regardless of exchange rate movements. InvestNow’s Foundation Series has NZD-hedged versions of its Total World and US 500 funds. Unhedged funds benefit when NZD falls and lose when NZD rises. For long-term investors, hedging reduces volatility without significantly affecting long-run returns.
How do I start investing in Smart (formerly Smartshares), Kernel, or InvestNow?
All three platforms allow online account opening in under 15 minutes. You’ll need an IRD number, NZ bank account, and proof of identity (driver licence or passport). Minimum investments: $250 lump sum (or $50/month on a regular investment plan) for InvestNow; $1 for Kernel; Smart direct requires $500 lump sum or $50/month auto-invest.