Smartshares Review: Are New Zealand's Best-Known ETFs Right for You?

Smartshares is New Zealand's largest issuer of exchange-traded funds. Its range covers the NZ Top 50, the Australasian market, US 500, global equities, global bonds, property, and ethical options — fourteen ETFs in total. Management fees range from 0.20% for the simpler index funds up to 0.75% for specialised or active ETFs.

Smartshares ETFs can be bought through any NZX broker or through platforms like InvestNow (zero commission), Sharesies (1.9% transaction fee capped), or directly from Smartshares with a NZ$500 minimum and a NZ$30 one-off establishment fee.

The Key Funds

Smartshares NZ Top 50 Fund (NZG): 0.54% management fee. Tracks the S&P/NZX 50 Index. The most popular NZX ETF. A simple way to get diversified NZ share exposure in a PIE tax wrapper with a capped 28% PIR. The Aus-Top 50 (AUS) does the same for the Australian market at 0.54%.

Smartshares US 500 Fund (USF): 0.20% management fee. Tracks the S&P 500 Index. The lowest-fee Smartshares fund and the cheapest way for a NZ investor to get S&P 500 exposure in a PIE wrapper. The USF has been consistently one of the best-performing funds in the range due to the strong US equity market performance over the past decade. On a NZ$50,000 investment, the annual fee is NZ$100 — about a third of what many actively managed global funds charge.

Smartshares Global Equities ESG Fund (ESG): 0.70% management fee. Tracks the MSCI World SRI Low Carbon Index. Combines global equity exposure with ethical screening. The higher fee reflects the specialised nature of the index, which applies additional screening beyond standard market-cap weighting.

Smartshares NZ Property Fund (NZZ): 0.59% management fee. Tracks the S&P/NZX All Real Estate Index. Exposure to NZ-listed property companies. The fund has historically provided a decent dividend yield alongside moderate capital growth, making it a core portfolio component for income-focused investors.

Smartshares International Bond Fund (BND): 0.40% management fee. Tracks a global aggregate bond index. One of the few NZD-denominated PIE bond ETFs available, offering fixed income exposure without the complexity of individual bond buying.

Trading and Access

The cost of buying Smartshares depends entirely on the platform you use. On InvestNow, there is zero commission — you pay only the fund's management fee. On Sharesies, a 1.9% transaction fee applies, capped at NZ$25 for NZX orders. On ASB Securities, NZ$15 per trade. Direct from Smartshares, NZ$30 one-off establishment fee plus a NZ$500 minimum.

The cheapest combination for most investors is to buy Smartshares ETFs through InvestNow on a regular investment plan. The NZ$50 minimum per fund is accessible, the zero commission means no transaction drag, and the PIE tax wrapper handles the tax efficiently. For lump sum purchases, the same logic applies — buy on InvestNow at zero commission rather than through a broker charging per trade.

The PIE Advantage

Most Smartshares funds are Portfolio Investment Entities, meaning investment income is taxed at your Prescribed Investor Rate capped at 28% — even if your marginal income tax rate is 33% or 39%. For higher-rate taxpayers in the accumulation phase, this tax efficiency adds a meaningful return advantage over holding equivalent investments outside a PIE structure.

Who It Suits

For NZ investors who want indexed, low-cost market exposure in a PIE tax wrapper and prefer to buy through their existing brokerage or platform, Smartshares is the natural choice. The funds are simple, the fees are transparent, and the range covers everything a typical portfolio needs.

The limitation is the fund range — fourteen funds is broad enough for a core portfolio but does not cover sector-specific or thematic exposures beyond property and ESG. For that, Kernel's 27-fund range or third-party managed funds offer more options.

The Dividend Experience

Smartshares ETFs pay dividends quarterly or semi-annually depending on the fund. The NZ Top 50 Fund (NZG) typically pays quarterly distributions reflecting the dividends from the underlying NZX 50 companies. The US 500 Fund (USF) pays semi-annually. Dividends are paid into your brokerage cash account or reinvested if your broker supports a dividend reinvestment plan.

The PIE structure means the dividend tax treatment is simpler than holding individual shares directly. Tax on fund distributions is calculated at your PIR, capped at 28%, and handled by the fund manager. You do not need to calculate your own dividend withholding tax or file separate tax returns for PIE income beyond including it in your annual tax return.

For buy-and-hold investors, the automatic reinvestment of dividends is an important factor. If your broker automatically reinvests Smartshares distributions, the compounding effect is significant over time. On a NZ$50,000 NZG holding yielding about 4%, the annual dividend of NZ$2,000 reinvested each year adds roughly NZ$30,000 to the portfolio over twenty years at a 5% growth rate.