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Smartshares, NZX’s Exchange Traded Funds (ETFs) business this month celebrates 20 years since the launch of the first ETF in New Zealand – the NZ Top 10 (TNZ) fund, which aims to provide returns that closely match the return on the S&P/NZX 10 Index.
New Zealand was the fourth country in the world to launch ETFs behind Canada (1990), the USA (1993) and Japan (1995).
When the NZ Top 10 fund launched, it included: Air New Zealand; Carter Holt Harvey; Fletcher Challenge Forestry Division; Fletcher Challenge; Brierley Investments; Goodman Fielder; Lion Nathan; Fernz Corporation; Telecom Corporation of New Zealand; amd Wilson and Horton.
Today, it includes: Auckland International Airport; Contact Energy; Fletcher Building; Fisher & Paykel Healthcare Corporation; Meridian Energy; Ryman Healthcare; SkyCity Entertainment Group; Sky Network Television; Spark New Zealand; and Z Energy.
As the pioneer of ETFs in New Zealand, Smartshares is committed to developing products that offer investors a range of diversified, low-cost and easily accessible investment options. Smartshares offers New Zealand’s broadest range of passive funds across the main asset classes, cash, bonds, shares and property.
Over the past 20 years Smartshares has demonstrated significant growth, with more than 50,000 investors now having an investment in its ETFs through financial advisors and KiwiSaver schemes, while the number of direct unitholders has risen to more than 10,000. This growth in wholesale and retail investors has seen on market trade volumes increase to more than $100 million year to date. In addition, total Smartshares funds under management has now surpassed $1.6 billion.
In 2014, NZX significantly increased its investment in and strategic focus on growing the Smartshares business and the range of ETFs on offer. From December 2014 to November 2015, Smartshares boosted its portfolio of ETFs, listing 18 new funds on the NZX Main Board, bringing the total number of ETFs on offer to 23. The new ETFs allow investors to create personalised, globally diversified portfolios, by investing withNew Zealand currency.
NZX’s significant investment in creating new ETFs reflects its commitment to the development of New Zealand’s passive funds management industry, which has been a high-growth sector globally, and an area where NZX sees considerable potential.
NZX Head of Funds Management Aaron Jenkins commented: “Smartshares has played a critical role in the development of ETFs in New Zealand, and NZX’s continued investment in this business signals our commitment to creating a vibrant market that offers investors diversified, low-cost, accessible investment solutions.”
Smartshares is currently focussed on increasing market awareness of its ETFs and continuing to educate retail and wholesale investors about its product offering and the benefits ETFs provide.
To improve transparency, the Smartshares website (www.smartshares.co.nz) has recently been updated to include historic dividends, market announcements and fund factsheets and summary pages. For direct investors, an online verification system has also been implemented enabling ETF application forms to be completed online, without the need to submit physical copies of identification documents.
