Smartshares v direct

[Untamed]

Can somebody please explain to me why there is such a huge price difference between buying (for example) VOO directly, as opposed to buying USF (which invests in VOO)? I do understand that buying via something like Smartshares, costs more in fees, but why the huge difference in price?

I can't get my head around the fact that USF costs me $15.98 today, but VOO would cost me $504US.

I must be missing something, which is no doubt blatantly obvious - just not to me.

[ValueNZ]

Can somebody please explain to me why there is such a huge price difference between buying (for example) VOO directly, as opposed to buying USF (which invests in VOO)? I do understand that buying via something like Smartshares, costs more in fees, but why the huge difference in price?

I can't get my head around the fact that USF costs me $15.98 today, but VOO would cost me $504US.

I must be missing something, which is no doubt blatantly obvious - just not to me.

One unit of USF wouldn't equate to one unit of VOO.

[Untamed]

One unit of USF wouldn't equate to one unit of VOO.

OK, that makes sense. So if I have $1000 worth of USF, which is 1000 units, that's the same as $1000 worth of VOO, but something like 2 units?

Is there any advantage of one over the other, other than the higher fees via Smartshares?

[ValueNZ]

OK, that makes sense. So if I have $1000 worth of USF, which is 1000 units, that's the same as $1000 worth of VOO, but something like 2 units?

Is there any advantage of one over the other, other than the higher fees via Smartshares?

I can see there are 52,226,994 units of USF outstanding, which holds around 1,006,634 units of VOO.

Meaning one unit of USF equates to 0.019 units of VOO. So holding 1000 units of USF would be the equivalent of holding 19 units of VOO.

As for which one is better, holding USF or VOO, I think is nuanced and dependent on your own situation. I'll take a look and let you know what I think.

[ValueNZ]

I suggest reading this article, https://moneykingnz.com/smartshares-us-500-usf-vs-vanguard-sp-500-voo-which-etf-is-better/.

Ownership of VOO would be subject to FIF tax, but you might not be subject to that under the de minimis exemption so long as your overseas investments total less than $50k.

USF does pay FIF tax but just directly for you instead of having to pay it yourself.

So you can avoid paying FIF by owning VOO instead of USF if your cost basis is less than 50k.

I am no accountant, nor have I looked at this very long so don't take this as advice.

[ValueNZ]

Also consider using Interactive Brokers if you do decide on VOO, in order to minimise fees.

[Untamed]

I suggest reading this article, https://moneykingnz.com/smartshares-us-500-usf-vs-vanguard-sp-500-voo-which-etf-is-better/.

Ownership of VOO would be subject to FIF tax, but you might not be subject to that under the de minimis exemption so long as your overseas investments total less than $50k.

USF does pay FIF tax but just directly for you instead of having to pay it yourself.

So you can avoid paying FIF by owning VOO instead of USF if your cost basis is less than 50k.

I am no accountant, nor have I looked at this very long so don't take this as advice.

I would absolutely qualify for the FIF exemption 

Also consider using Interactive Brokers if you do decide on VOO, in order to minimise fees.

Can buy through Sharesies, which is much cheaper. I'm not worried about it being a custodial service. I now just accumulate to a certain point, then transfer out.

I'm not really seeing any great advantage to investing directly into VOO. Thanks for your helping me get my head around the price difference though.

[ValueNZ]

I would absolutely qualify for the FIF exemption 

Can buy through Sharesies, which is much cheaper. I'm not worried about it being a custodial service. I now just accumulate to a certain point, then transfer out.

I'm not really seeing any great advantage to investing directly into VOO. Thanks for your helping me get my head around the price difference though.

If you've decided on USF, then Sharesies would probably be the cheapest, as you can't buy NZX securities on Interactive Brokers.

But if you decide on VOO, then Interactive Brokers would be miles cheaper.

Sharesies FX fee 0.5%
Interactive Brokers FX fee 0.03%

Sharesies transaction fee 1.9% (up to $25)
Interactive Brokers transaction fee USD 0.005 per share, USD 1 minimum, and 1% of trade value maximum.

Anyway something for you to consider if you buy anything not on the NZX.

[Untamed]

But if you decide on VOO, then Interactive Brokers would be miles cheaper.

Sharesies FX fee 0.5%
Interactive Brokers FX fee 0.03%

Sharesies transaction fee 1.9% (up to $25)
Interactive Brokers transaction fee USD 0.005 per share, USD 1 minimum, and 1% of trade value maximum.

Anyway something for you to consider if you buy anything not on the NZX.

Oh! Thanks 

[Raven]

If you have decided on Smartshares and regular investing then you might want to consider buying direct from them via their 20th of the month subscription. Buying direct means your units are registered in your own name on your CSN, there's no buying fee and you buy at NAV. Buying via any platform or sharebroker means you are buying on market, which from my observation is generally above NAV.

[Untamed]

If you have decided on Smartshares and regular investing then you might want to consider buying direct from them via their 20th of the month subscription. Buying direct means your units are registered in your own name on your CSN, there's no buying fee and you buy at NAV. Buying via any platform or sharebroker means you are buying on market, which from my observation is generally above NAV.

I've had a look at this option, but I don't like the subscription model, and the $30 to sign up. I'm now only able to invest very small amounts, so Sharesies works for me right now.

Thanks for the suggestion though.

[FatTed]

If you wish to invest in Smartshares "Invest Now" is cheaper and invests your money more quickly
Can also use this platform for Vanguard via their foundation series