Investor community expanding
Growth in Kiwisaver has prompted some investors to look at putting more money into other managed funds, one investment provider says.
Investment platform Investnow offers investors access to managed funds via an online account. Investors can start with a smaller deposit than is usually required, and no administration or transaction fees.
General manager Mike Heath said it now had 11 fund managers on the platform, including AMP Capital, ANZ Investments, Harbour, Salt and Vanguard.
Some of these fund managers would normally require minimum investments of $10,000. Via Investnow, investors can start with $250.
Now it has added Smartshares funds, which are passively invested to track market indexes. Its most popular is the NZ Top 50.
Investnow will offer seven Smartshares funds offering clients access to New Zealand, Australian, US, Europe and other global markets.
There has been a growing shift to this style of investment because it is cheaper than active management, where fund managers try to beat market returns.
Investnow already offered passive funds run by Vanguard and expected Smartshares to be popular too, Heath said.
The two Vanguard funds charge 0.2 per cent and 0.26 per cent per year in management fees, compared to 1.79 per cent for Harbour’s Australasian Equity Focus Fund – Retail, or 1.56 per cent for Russell Investments’ Hedged Global Shares Fund.
The Smartshares funds’ fees range from 0.35 per cent per year to 0.75 per cent.
He said the people using Investnow services ranged from seasoned investors through to younger people and those setting up accounts for their children.
After 10 years of Kiwisaver, some people were becoming more aware of how managed funds could be used to build wealth.