We structure all our funds to be optimised for the NZ resident investor, including tax. For the S&P 500 Fund, we use a US-domiciled ETF. This is because as a US-domiciled fund holding only US securities, there is no tax leakage, and all foreign tax credits can be captured. See page 7 of the international tax guide for full details.

For those thinking of going direct, remember being a New Zealand Portfolio Investment Entity (PIE), the obligatory and annoying FIF tax is capped at 28%.

So for those on RWT rates of 33% or 39%, it means 0.25% or 0.55% per annum less tax and therefore after-tax return for the investor, which more than covers any difference in the management fee.

For all investors and those thinking de-minimis (the $50k threshold many seem over-obsessed with), there are still alternative costs and inefficiencies to consider.

Currency hedging is designed to minimise the impact of NZD/USD currency fluctuations. Whether currency hedging is attractive is up to you. But your return should be much closer to that published for the S&P 500 in New Zealand and international media (always quoted in USD), but for you in New Zealand dollars.