New Zealand investors have often had a home bias, but as the local share market has underperformed over the past five years, KiwiSaver and investment managers say the focus has increasingly turned international.
Sharesies said earlier this month that 80% of its trading volumes were now on US markets. It credited the introduction of the US500 fund with driving an increase of switches into its KiwiSaver.
Kernel said it too was seeing a big shift towards global exposure. Its Global 100 fund has more than doubled in size over the past year, from $346.8 million to $724.1 million, while its High Growth Fund which provides broad international equity exposure grew 122%.
It said about 78% of all assets on its platform had global exposure.
“Four out of $5 is being invested in international shares,” founder Dean Anderson said.
“That's where a lot of people have been looking. It's performed really strongly, and people are looking for diversification.”
But he said there were still local opportunities. Kernel drove the launch of the Emerging Opportunities Index, which measures the performance of smaller companies. He said it was up more than 17% over 12 months compared to 9.2% for the S&P500 in NZD terms.
“There are a lot of great companies here. They want to raise capital. This is an important part of a stock market that smaller companies that are looking to grow list, raise capital, get coverage and grow over time,” Anderson said.
“And we felt like if we could launch an index fund that covered that, it would help create liquidity and flow of money into that part of the market. And we've definitely seen that.”
He said it was a way for investors to get exposure to stocks that might not be offered by traditional fund managers or brokers.
“A lot of brokers will only sort of cover 15, 20 stocks. And so they won't actually invest you into any of these names because they don't have the research coverage to tick it off. But with a fund, you can get that exposure in a nice, diversified way.”
Many companies had become targets for acquisition, he said.
“Particularly when the US dollar had been so strong, so you'd have an offshore buyer look at this and go, wow, in their local currency, these look like very attractive firms to buy. And unfortunately, that has meant from the exchange perspective, we are losing companies and listings because, they haven't had the local support. And investors are being presented with these very compelling offers after sort of being flat for a couple of years and they go, ‘yeah, I don't mind cashing out now for a quick 75% return on where it is today’.”
He said New Zealand’s big listed companies tended to be higher dividend payers but not high-growth compared to some of the opportunities investors could see offshore.
“They’re not the tech companies that attract our general interest. And I think that's part of a challenge we have here. And I think it's a challenge to the exchange and companies. We are not seeing a lot of the great innovator and success stories that actually do exist in New Zealand coming to the New Zealand stock market. You know, they are bypassing and going to the ASX or they're going to the US or they're just simply selling to an overseas buyer.”
Kernel said assets on its platform grew 104% in total in 2025.
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