Simplicity launches NZ focussed funds with record low management fees
Non-profit Simplicity has launched NZ-focused investment funds with record low management fees, as it seeks to offer
more choice to members wanting to invest in NZ’s stock and bond markets.
The NZ Share Index Fund invests in the 50 largest companies that make up the NZX50 index. The NZ Bond Index Fund tracks
an index of over 30 NZ investment grade bonds.
Both funds have an annual administration fee of $30, and annual management fees of $1 for every $1,000 invested, (0.1%
p.a.). The minimum investment is $10,000. There is no establishment fee or buy/sell spread.
Similar passively-managed funds from SmartShares, and actively managed funds from other managers, have management fees
3-4 times higher, although some do not charge a fixed administration fee.
Simplicity’s fees are in line with developed markets overseas, where index funds can be bought at very low cost. “Kiwis
should have access to products at the same price as investors in big developed markets. Now they do,” said Mr Stubbs.
“As a non-profit, we only charge what it costs, and that means management fees much lower than our profit making
competitors” said Mr Stubbs.
“Now we’re managing over $400 million. Economies of scale are kicking in, and we can pass those on to our members,” he
“For years Kiwis have been overcharged for fund management by their banks, fund managers and the Stock Exchange,” said
Mr Stubbs. “Witness the $525m in KiwiSaver fees this year. It’s wrong, so we’re doing something about it,” he said.
“There’s an ever growing body of evidence showing the best way to get higher returns, in bull and bear markets, is by
paying lower fees,” said Mr Stubbs.
The funds are also a statement of optimism in the NZ economy, as over $50m a week pours into local capital markets from
“The treasury estimates KiwiSaver funds will have over $200 billion by 2030, and around 50% of that will be invested in
NZ,” said Mr Stubbs.
“It’s a rising tide of capital, and NZ capital markets have a very bright future,” he said. “We want investors to have
the chance to capture as much of that upside by offering funds with very low fees,” he said.
18 months after launch, Simplicity has over 13,000 members and $400m funds under management, and is NZ’s fastest growing
Investments can be made directly at www.simplicityfunds.kiwi or via financial advisors.