Foundation Series Funds: PIE Funds powered by Vanguard

With a New Zealand twist to benefit Kiwi investors

The Foundation Series Funds (Foundation Series) is the InvestNow house-brand of Portfolio Investment Entity (PIE) managed funds, that are tailored to meet the needs of New Zealand investors.

Within Foundation Series, we’ve built a select range of funds tailored to InvestNow customers that love global share funds managed by Vanguard… but with a few extra benefits for the New Zealand investor.  

These funds invest directly into Vanguard Exchange Traded Funds (ETFs), which are passively managed and aim to replicate the performance of international share market indices. 

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Foundation Series Funds: PIE Funds powered by Vanguard

Available in our managed fund range & the InvestNow KiwiSaver Scheme

Fund name

Sector

Invests in

Currency Hedging Target

Mgmt. Fee

Buy/ Sell Transaction Fee
Foundation Series Total World Fund International Equities Vanguard Total World Stock ETF (Ticker: VT)  Unhedged 0.07% p.a. 0.50% / 0.50%
Foundation Series Hedged Total World Fund (NEW) International Equities Vanguard Total World Stock ETF (Ticker: VT) 100% Hedged to the NZ Dollar  0.07% p.a. 0.50% / 0.50%
Foundation Series US 500 Fund International Equities Vanguard S&P 500 ETF (Ticker: VOO)  Unhedged 0.03% p.a. 0.50% / 0.50%
Foundation Series Hedged US 500 Fund (NEW) International Equities Vanguard S&P 500 ETF (Ticker: VOO) 100% Hedged to the NZ Dollar  0.03% p.a. 0.50% / 0.50%

See the full range of funds from Foundation Series, including the available historical performance, fee and product disclosure information.

See the full range of options from Foundation Series Funds

Reasons to choose the Foundation Series range of Vanguard-powered funds

  • Exposure to two of the world’s most popular ETFs

    The funds invest directly into either the popular Vanguard S&P 500 ETF (VOO), or the Vanguard Total World Stock ETF (VT).

  • Incredibly low on-going management fees

    Management fees for these funds start from just 0.03% p.a. 

  • Convenient, tax-efficient structure

    The funds are Portfolio Investment Entities (PIE) funds, which are taxed automatically, and cap the applicable tax rate at 28% offering significant savings for those on 30%, 33%, and 39% marginal tax rates. Compared to investing in offshore funds like Australian Unit Trusts or directly into ETFs, investor returns can be increased by up to 0.55% per annum as a result of PIE tax benefits. Additionally, these funds have minimal tax slippage.  

  • Available hedged to the New Zealand Dollar

    The funds are available fully hedged to the New Zealand Dollar, for investors that want to target a return in-line with the underlying investment and mitigate the impact of currency fluctuations on their overall returns. 

  • No additional foreign exchange required

    The funds are priced in NZ dollars and all transaction costs are covered by the funds’ 0.50% entry/exit fee.

You could pay up to 28% less tax on your Vanguard investments...

The new Hedged and Unhedged Foundation Series US 500 Fund and Total World Fund – invested through index funds management pioneer Vanguard, can help Kiwis achieve their investment goals more effectively by using some of the most cost-and tax-efficient vehicles in the market…

Multi-rate PIE (Portfolio Investment Entity) funds like the Foundation Series Funds have a maximum tax rate of 28%; by contrast, Kiwi who invest in the Vanguard Australian unit trust funds on InvestNow or directly in the same Vanguard ETFs (Vanguard S&P 500 ETF(VOO) and (Vanguard Total World Stock ETF (VT)) via share brokers or other platforms will be taxed at their marginal tax rate, which can be as high as 39%.

Investor’s Marginal Tax Rate

PIR

Foundation Series Tax Charge (p.a.)

VOO / VT ETF Tax Charge (p.a.)

Tax Savings (p.a.)

Tax Savings (%)
39% 28% 1.40% 1.95% 0.55% 28%
33% 28% 1.40% 1.65% 0.25% 15.10%

*Foreign Investment Funds (FIF) Fair Dividend Rate Calculation: 5% Taxable Income p.a. x 39% Marginal Tax Rate = 1.95% p.a. tax charge on assets. **PIE Fair Dividend Rate Calculation: 5% Taxable Income p.a. x 28% Prescribed Investor Rate = 1.40% p.a. tax charge on assets. ***Tax savings (p.a.) = 1.95%-1.40% =0.55% p.a. of tax savings. ****Tax savings (%) = 0.55%/1.95%=28%

PIE Funds could help you generate better after-fees-and-tax outcomes

Click here to see how the above tax savings translates to cash-in-hand…

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Available in InvestNow managed funds & the InvestNow KiwiSaver Scheme

If you have an existing InvestNow managed funds account, login here. If you have an existing InvestNow KiwiSaver Scheme account, login here.