Going global – Tax tips and traps for local investors

Kiwis like their offshore travel.
According to the latest data from Statistics NZ, almost 264,000 New Zealanders jetted overseas during October 2017 – up about 33,000 compared to the previous October and close to 100,000 above the figure for the same month in 2007.

Perhaps that familiarity with the foreign is why Kiwis are also happy enough to ship their money to global destinations, unaccompanied. Figures from the Reserve Bank of NZ (RBNZ) show the wholesale managed funds market consisted of […]

People invest for all manner of reasons but their goals can be boiled down to just two: income or growth.

In practice, of course, most investors will want a mix of both income and growth in proportions according to their risk appetite and specific life situation.

Growth assets tend to be ‘riskier’ investments such as shares while NZ investors have historically derived much of their income from the ‘safe’ haven of bank term deposits (TDs).

But the division between ‘income’ and ‘growth’ assets is […]

Before 2007 fund investors in NZ were served up the financial equivalent of meatloaf: returns and tax were baked together into one unappetising lump according to the antiquated legislative recipe of the day.

Unsurprisingly, in those dark days many retail investors preferred home-made direct portfolios of shares and fixed interest assets over the uniform concoction of meat and sawdust dished up by the tax-challenged managed fund industry.

But in 2007 the Labour government rewrote the fund tax recipe […]

As InvestNow founder, Anthony Edmonds, explained last month, mapping out your destination by working out your strategic asset allocation (SAA) is the first – and most important – step in planning an investment journey.

While an investor’s SAA helps describe the route, end-point and comfort levels of the proposed trip, an investor has to ultimately choose between different investment vehicles to translate their plan into action.

“Many investors are happy enough taking the bus; others might prefer to drive a car themselves,” Edmonds says. “Or for the thrill-seekers there’s always a motorbike.”

For […]

PIEs and PIE tax – your questions answered

Article by InvestNow

The disclaimer

The following are a few of the more common questions our customers ask us about PIE funds and PIE tax.  This post does not constitute a warranty or advice. You should seek independent professional advice on investments, tax, legal and accounting matters.

What is a PIE?

A portfolio investment entity (PIE) fund is a type of New Zealand managed fund that invests the contributions from investors in […]

It appears that a great way to get some Kiwi investors to love an investment fund is to make it an “ETF”, which is short for Exchange Traded Fund.

Since the launch of the first ETF, the S&P 500 ETF (SPY) back in 1993, ETFs have seen tremendous growth globally ($4.5 trillion as at Sept ’17 – source ETFGI.com).

In the US market, where the investment industry has been built around using the stock exchange as the infrastructure for delivering investment solutions to […]

This is the question: is active funds management worth the effort?

As far back as 1609 William Shakespeare was mulling over the active/passive conundrum in one of the most famous passages from his Netflix mini-series, ‘Hamlet’ (working title: ‘CSI Copenhagen’).

“Whether ’tis nobler in the mind to suffer

The slings and arrows of outrageous fortune,” the procrastinating Danish protagonist whined.

“Or to take arms against a sea of troubles.”

Often misinterpreted as a contemplation on mortality, Hamlet’s speech was actually a query posed to the Danish Investment […]

Anthony Edmonds – InvestNow

12th June 2017

This is a great question, and one we receive often from our customers and prospective customers.

If we assume that an investor has a tax rate of 33% for their FIF (Foreign Investment Fund) investments, and a PIR (Prescribed Investor Rate) of 28% for their PIE (Portfolio Investment Entity) funds, then when their global share returns are over 5%, they would pay 1.65% tax on their FIF fund investment (being 33% multiplied by the 5% FDR, or Fair […]