Smartshares rolls out four new Core ETFs in New Zealand

Jul 17th, 2020 | By | Category: Equities

Smartshares, New Zealand’s only ETF issuer, has launched four new funds on the New Zealand Exchange (NZX).

NZX Chief Executive, Mark Peterson

NZX Chief Executive, Mark Peterson.

The ETFs are part of Smartshares’ ‘Core Series’ which is designed to offer mainstream exposures that form the core building blocks of portfolios.

The new launches include three equity ETFs providing access to New Zealand and Australian stock markets as well as currency-hedged exposure to a global equity portfolio.

The fourth is a fixed income ETF that is the first in New Zealand to offer targeted exposure to local government bonds.

The Smartshares S&P/NZX 50 ETF (NZG NZ) tracks the S&P/NZX 50 Index which consists of the 50 largest stocks listed on NZX, weighted by market capitalization. The fund comes with an expense ratio of 0.20%.

The Smartshares S&P/ASX 200 ETF (AUS NZ) tracks the S&P/ASX 200 Index which consists of the 200 largest stocks listed in Australia, also weighted by market capitalization. It comes with an expense ratio of 0.30%.

The Smartshares Total World NZD Hedged ETF (TWH NZ) tracks the FTSE Global All Cap (100% Hedged to the New Zealand Dollar) Index. The index covers large-, mid-, and small-cap stocks from both developed and emerging markets, and currency exposure relative to the New Zealand dollar is hedged on a monthly basis. The fund comes with an expense ratio of 0.46%.

The Smartshares S&P/NZX NZ Government Bond ETF (NGB NZ) tracks the S&P/NZX NZ Government Bond Index which consists of sovereign bonds across the maturity spectrum that have been issued by the New Zealand government. The index is currently yielding 0.62% and has an effective duration of 6.1 years. It comes with an expense ratio of 0.20%.

There are now eight ETFs within Smartshares’ Core Series. The other funds offer US large-cap (S&P 500 Index), unhedged global all-cap (FTSE Global All Cap Index), global aggregate bond (Bloomberg Barclays Global Aggregate Index), and cash (S&P/NZX Bank Bill 90-Day Index) exposures. They maintain expense ratios ranging between 0.20% and 0.40%.

NZX Chief Executive, Mark Peterson, said, “The Smartshares Core Series will add depth and breadth to the choices for local investors on their local market – further driving the growth of ETFs in New Zealand which has jumped 243% in terms of the total value of trades in the first half of 2020.

“ETFs are still in their infancy here in New Zealand – representing only 3.5% of the equities and funds traded on-market – with huge potential for growth when you look at the trajectory in the US where index-tracking funds have overtaken the value of actively-managed stock funds.”

Smartshares Chief Investment Officer, Stuart Millar, added, “There is clear market demand for cost-effective ETFs tracking the core market benchmarks, and the Core Series is expected to be widely used across the institutional, adviser and retail investor markets. We are now offering the basic building blocks – the foundations – for a highly diversified portfolio that’s really cost-effective to put together.”

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