Exchange-traded funds

An exchange traded fund (ETF) is an investment that has most of the characteristics of a fund but trades in the market like a single security.

ETFs usually track an index, which means they hold the same securities, in the same proportions, as the securities included in the chosen index. The fact that they track an index means ETFs trade at prices very close to their underlying value and are usually more tax efficient than conventional funds.

The following ETFs are currently available on the NZSX Market:

• TENZ (NZX 10 Fund)
• MIDZ (NZX MidCap Index Fund)
• MOZY (NZX Australian MidCap Index Fund)
• FONZ (NZX 50 Portfolio Index Fund)
• WINZ (AMP Investments World Index Fund)
• OZZY (Australian 20 Leaders index Fund)

A significant benefit for investors is the opportunity to achieve a return the same as that of an index, and to purchase one security which is essentially 10 securities rolled into one – making ETFs a cost effective investment.

Smartshares

• TENZ, MIDZ, MOZY, OZZY and FONZ are part of the Smartshares family of ETFs. Find out more about Smartshares at www.smartshares.co.nz.