ETF Scan: New Zealand
It says a lot about the size a nation’s economy when the second largest stock by market cap is the capital city’s airport. New Zealand and its sharemarket are tiny compared to its global peers, but the local NZX bourse has been able to offer exchange traded products to investors.
SmartShares, a division of the NZX, offers five ETFs in New Zealand, three that focus on the local market and two that tracks shares in Australia:
New Zealand Broad Market
1. smartTENZ (NZE:TNZ)
The TNZ tracks New Zealand’s ten largest firms by market cap, including Telecom New Zealand (NZE:TEL), Contact Energy (NZE:CEN) and Auckland International Airport Ltd. (NZE:AIA).
2. smartMIDZ (NZE:MDZ)
smartMIDZ follows the next 40 NZ listed companies and includes names such as New Zealand Oil and Gas (NZE:NZO), Vector (NZE:VCT), and Sanford Limited (NZE:SAN)
3. smartFONZ (NZE:FNZ)
The smartFONZ fund tracks the total of the TNZ plus the MDZ.
Australia Broad Market
4. smartMOZZY (NZE:MZY)
The MZY tracks the S&P/ASX mid cap 50 index, which tracks the 51st – 100th firms listed in Australia by market capitalization.
5. smartOZZY (NZE:OZY)
The OZY tracks the S&P/ASX 20, which tracks the 20 largest Australia listed firms by market cap. It holds the expected BHP Billiton, Telstra, and the Aussie financials.
Smartshare’s funds pre-date the current ETF revolution, and thus have some mutual fund characteristics, most notably a NZD 1,500 minimum investment. But they are passively indexed, open ended, tradable funds with low expense ratios.
New Zealand is a nation the size of Great Britain, with more natural resources, and decades of strong population growth ahead of it. It is also a major commodities exporter conveniently located near booming Asian markets, and was the first nation in the world to sign a free trade agreement with China.
Kiwi investors would be wise to invest in their own economy, and investors the world over would be foolish not to look at NZ exposure for their portfolios.
Currently the only internationally listed ETF that tracks New Zeland is the US listed:
