Top 10 benchmarks used by New Zealand investors
Sharesight’s benchmarking feature opens up a world of possibilities for investors to track their portfolio performance against more than 170,000 stocks, exchange-traded funds (ETFs) or mutual funds from around the world.
With a wide range of global securities to choose from, investors can put their investment performance into context by selecting the benchmark that best aligns with their investment goals. For instance, choosing an ETF or fund that tracks a particular index, or one that tracks a known basket of stocks in an industry to get a commensurate comparison for their own portfolio.
- Smartshares NZ Top 50 ETF
- SPDR S&P 500
- SPDR 200 Fund
- Smartshares NZ Mid Cap ETF
- Ishares Small Ords
- Smartshares NZ Top 10 ETF
- SPDR 50 Fund
- Vanguard All-World ex-US ETF
- NZX Limited
- Vanguard S&P 500 ETF
When it comes to setting a benchmark, many investors choose ETFs as these typically reflect the performance of a common index, without the costs involved in actually owning that basket of stocks. This also gives investors a realistic indicator of how their money could have performed, without the effort of individually selecting and purchasing the stocks themselves.
We looked into the most commonly-used benchmarks by New Zealand Sharesight users, and unsurprisingly ETFs featured strongly, with the Smartshares NZ Top 50 ETF being the most popular choice. Unlike Australian and US Sharesight users, New Zealand users tend to choose more global benchmarks for their portfolios, leveraging ETFs listed on the NYSE and ASX as well as the NZX.
Here are the top 10 benchmarks chosen by New Zealand Sharesight users:
The Smartshares NZ Top 50 ETF (NZX: FNZ) is designed to track the performance of the 50 largest companies on the NZX. It tracks the same companies as the S&P/NZX 50, but with a 5% weighting for each company.
The SPDR S&P 500 ETF Trust (NYSE: SPY) is the world’s largest ETF, designed to track the top 500 US companies in terms of market capitalisation. It covers approximately 80% of available market capitalisation.
The SPDR S&P/ASX 200 Fund (ASX: STW) is an ETF that aims to track the performance of the top 200 largest and most liquid publicly listed Australian companies, represented by the S&P/ASX 200 Index. It offers exposure to over 90% of Australia’s market capitalisation.
The Smartshares NZ Mid Cap ETF (NZX: MDZ) aims to track the returns of the S&P/NZ Mid Cap Index. It includes companies listed on the NZX Main Board and included in the S&P/NZ 50 Index, but it excludes companies included in the S&P/NZX 10 Index, as well as companies issued by non-New Zealand issuers.
The iShares Small Ords ETF (ASX: ISO) is designed to reflect the performance of small-capitalisation Australian companies included in the S&P/ASX 300 Index, but not in the S&P/ASX 100 Index.
The Smartshares NZ Top 10 ETF (NZX: TNZ) is designed to track the returns of the S&P/NZX 10 Index, which includes 10 of the biggest companies listed on the NZX Main Board, but excludes companies issued by non-New Zealand issuers.
The SPDR 50 Fund (ASX: SFY) aims to replicate the returns of the S&P/ASX 50 Index. It tracks the 50 largest and most liquid stocks on the ASX, using float-adjusted market capitalisation.
The Vanguard FTSE All-World ex-US ETF (NYSE: VEU) seeks to track the return of the FTSE All-World ex-US Index, providing exposure to many of the world’s largest companies listed in major developed and emerging countries outside the US.
NZX Limited (NZX) is the national stock exchange of New Zealand. It is the only registered securities exchange in New Zealand, consisting of the NZX Main Board, NZX Debt Market, NZX Dairy Derivatives, NZX Equity Derivatives, and the Fonterra Shareholders' Market.
The Vanguard S&P 500 ETF (NYSE: VOO) is designed to track the performance of the S&P 500 Index, which includes 500 of the largest US companies. The returns of VOO are essentially the same as SPY, however VOO has a slightly higher growth rate than SPY due to its lower expense ratio.
To get started with benchmarking, all you need to do is access your Sharesight portfolio and click ‘Add a benchmark’ in the ‘Summary’ section.
Sharesight allows you to select from a drop-down list of the most commonly-used benchmarks, or alternatively you can search for any stock, ETF, or mutual fund Sharesight supports to use as a benchmark of your choice.
Selecting the Smartshares NZ Top 10 ETF (NZX: TNZ) as a benchmark, for example.
In the future, if you wish to change your benchmark simply click ‘Edit benchmark’, also located in the ‘Summary’ section.
Sharesight’s benchmarking feature is just one of the ways Sharesight helps you to stay on top of the performance of your investments. Benchmarking is available on Investor, Expert and Sharesight Pro plans. You can upgrade your plan to use this feature.
If you’re not using Sharesight yet, you can sign up for a free account to start tracking your investments (and tax) today.