New exchange-traded funds offer local access to bitcoin and gold.

The launch of four new exchange-traded funds (ETFs) by Kiwi investment fund manager Smart reflects the growing sophistication of New Zealand investors, the company’s Chief Executive Anna Scott says.

“The needs of Kiwi investors are evolving as New Zealand’s investing journey becomes more sophisticated,” she says. “It is important for us as a company to keep pace with these changes and the new ETFs are a response to market demands for local access to bitcoin and gold.” 

Smart, which has recently rebranded from its previous name Smartshares, launched four new ETFs focused on bitcoin, gold, US technology companies and the top 20 NZX-listed companies late last month. The first three are being offered in collaboration with iShares, the ETF arm of BlackRock, a global investment manager.

ETFs offer a flexible alternative to traditional investments by providing access to a broad range of assets, allowing investors to diversify without the complexities of managing a portfolio of individual shares or bonds. This makes them accessible to everyone, from first-time investors building confidence to seasoned wealth-builders looking to expand their portfolios with global exposure – all in a few easy steps.

Scott says ETFs allow New Zealanders to access high-performing and special interest markets across the globe without having to worry about offshore investing themselves, making it easier and simpler for Kiwis to build balanced portfolios for long-term wealth.

“Our ETFs track a wide range of global markets, giving Kiwis access to diversified investments across many industries and asset classes – all of which are available here in New Zealand, are priced in New Zealand dollars, are listed as PIE (portfolio investment entity) funds and are traded on the New Zealand Stock Exchange (NZX).

“They are accessible to all investors and can be bought and sold through digital platforms, brokers or financial advisers.

“With a single purchase, investors gain exposure to a broad range of companies or assets, thus reducing risk. A good analogy is that it’s like shopping in one place rather than having to visit lots of individual stores.

“Investing directly in shares is like looking for a needle in the haystack. Smart ETFs remove the need to find the needle. We provide a number of ways for investors to ‘buy the haystack’ through market-tracking products that allow you to invest all over the world.”

She says the ETFs can help Kiwis from all walks of life looking to make wise investments. Yet despite the increasing sophistication of Kiwis, the perception that investing is only for the wealthy is still a strong one.

“Kiwis have traditionally been reluctant to talk about money and while KiwiSaver has been fantastic in getting people interested in investing, we still have a long way to go. Our new Smart brand identity aligns with our vision to remove the hurdles and build confidence across all demographics to learn about investing.

“We have a tagline – ‘the wise invest Smart’ – which talks to our aim of helping Kiwis build long-term wealth through market tracking products.”

Smart is a wholly owned subsidiary of NZX Limited and has more than $12 billion in funds under management. It already enables Kiwis to diversify their portfolios across 40 ETFs and the new funds add to that offering.

Scott says the Smart Bitcoin ETF seeks to reflect the performance of bitcoin and will invest in the iShares Bitcoin Trust ETF. It is likely to attract tech-savvy investors who are comfortable with high volatility and risk in exchange for potential high returns – and are likely to have some experience with online trading platforms or cryptocurrency exchanges.

The Smart Gold ETF seeks to reflect the performance of gold and will invest in the iShares Gold Trust.

It may appeal to long-term portfolio investors who have a belief in gold’s historical value as a stable, secure asset in times of crisis.

“They are people who are interested in including an allocation in their portfolios to assets that can potentially provide a hedge against inflation or economic downturns and who are likely to already invest in property, blue-chip stocks or bonds,” Scott says.

The Smart US Technology (NZD hedged) ETF will invest in iShares S&P 500 Information Technology Sector UCITS ETF, while the Smart S&P/NZX 20 ETF will invest directly in the 20 largest NZX-listed companies in New Zealand.

Scott says the strategic alliance with BlackRock’s iShares means Smart is able to pair the local knowledge it has in New Zealand with the huge breadth of products BlackRock has available.

“Working with iShares is a natural fit because its mission dovetails closely with ours; providing world-class investment opportunities with easy access and affordable fees.”

Scott says it is important for investors to understand the “five golden principles” of investing, the first of which is to set goals. 

“These can include buying a house, saving for education or planning retirement, as investing with a purpose and having clear objectives keeps you on track during market ups and downs.”

Smart’s other principles are:

  • The importance of diversification
     This is key and is about spreading investments across the four main asset classes – cash, bonds, property and shares. A diversified portfolio should also include an allocation to overseas investments.
  • Time, not timing
     Forget timing, focus on time. Markets are in perpetual motion and move both up and down so trying to predict the best time to buy or sell can be stressful and counterproductive. This is why we recommend regular investing over time.
  • Sleep test
     If your portfolio keeps you up at night, it’s a sign something is not quite right. A good mix of lower-risk and higher-risk assets should align with your tolerance for risk and can help ride out market downturns.
  • Maintain a ‘core and niche’ approach
     It’s important to maintain a well-diversified balanced portfolio. A ‘core’ portfolio includes key long-term investments, while ‘niche’ investments are smaller, allowing more active positions like investing in sector-specific funds or higher-risk assets.

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 Disclaimers:

The Smart Exchange Traded Funds are issued by Smartshares Limited (Smart). The product disclosure statements are available at smartinvest.co.nz. Investing involves risk. The value of your investments can go down as well as up. Returns are not guaranteed. We recommend you seek professional assistance from a licensed Financial Advice Provider before making any investment decision.

iShares® and BlackRock® are registered trademarks of BlackRock, Inc. and its affiliates (“BlackRock”) and are used under license. BlackRock makes no representations or warranties regarding the advisability of investing in any product or the use of any service offered by Smartshares Limited.