Article written by InvestNow – 1st December 2022

We’re pleased to welcome the Foundation Series US 500 Fund and the Foundation Series Total World Fund onto InvestNow. These two new global shares funds feature some of the lowest management fees of any PIE fund in NZ.

7 great reasons to consider the new Foundation Series US 500 and Total World Funds:

1. Incredibly low on-going management fees of just 0.03% and 0.07% per annum respectively. In contrast, the management fee for the Vanguard International Shares Select Exclusions Index Fund is more than double at 0.20% per annum.
2. Exposure to two of the world’s most popular ETFs - the Vanguard 500 Index Fund ETF (VOO) and the Vanguard Total World Stock ETF (VT), all within tax efficient New Zealand Portfolio Investment Entity (PIE) fund structures.
3. Investors pay one-off transaction fees for each buy order (entry fee) and each sell order (exit fee), allowing these two funds to offer super-low ongoing management fees, which is ideal for long-term investors.
4. Investor returns can be increased by up to 0.55% per annum as a result of the PIE tax benefits. As multi-rate PIE funds, tax is charged at a maximum rate of 28%. In comparison, where Kiwis invest in the Vanguard Australian unit trust funds on InvestNow, they will be taxed at their marginal tax rate, which can be as high as 39%.
5. PIE tax is a final tax, so no more administration hassles! There’s no need to prepare and file a tax return every year, which is the case when investing in the Vanguard Australian unit trusts available on InvestNow.
6. No additional foreign exchange costs. The funds are priced in NZ dollars and all transaction costs are covered by the funds’ entry/exit fees.
7. Tax slippage is minimised as there is no additional non-resident withholding tax deducted on any of the underlying company dividends earned by the Foundation Series US 500 Fund and on 60% of the company dividends received by the Foundation Series Total World Fund. In contrast, for the Vanguard International Shares Select Exclusions Index Fund, non-resident withholding tax is fully deducted at 15% on all the company dividends received, resulting in tax slippage that reduces returns by around 0.30% per annum.

For more information on the impact of tax on investment returns, here is an excellent article that delves deeper into the benefits of utilising tax-efficient solutions such as the new Foundation Series Funds for your global shares exposure and how this could result in better financial outcomes for investors.

Pay lower management fees and less tax today by investing in Vanguard’s expertise through the new Foundation Series US 500 Fund and Foundation Series Total World Fund.

The issuer and manager of the Foundation Series Funds is Implemented Investment Solutions Limited.

You can download and view the PDS for both of these funds here.

The Foundation Series US 500 Fund and the Foundation Series Total World Fund are available today to all investors via the InvestNow platform. Login or create an account to invest.

Disclaimer: InvestNow is not a financial advisor and therefore we do not offer or provide personalised advice or recommendations. All investing involves risk. We encourage you to read the Product Disclosure Statement (PDS) of any prospective funds and consider seeking financial advice from a licenced provider, before making any investment decisions in any of the products offered on the InvestNow platform. Furthermore, any material relating to tax has been prepared for informational purposes only and is not formal tax advice, nor has it taken into account your individual tax circumstances.