Like sauce on a PIE: How Kernel Shares & ETFs complements Kernel Funds

Kernel Shares & ETFs is a great way to buy US shares and ETFs from NZ. While we still stand by the benefits of our index funds designed for New Zealanders, individual shares & ETFs can still be a part of a well-rounded portfolio. In fact, it’s a great complement to Kernel’s range of low-cost index and managed funds.

Think of shares & ETFs as a little tomato sauce on your diversified PIEs. These two products are perfect for building a well diversified portfolio using the ‘core-satellite strategy’.

Core-satellite investing is a strategy that makes it easy to build a diversified portfolio. To follow this strategy, your portfolio should include:

• Core - 80-90% of your investments in broadly diversified low-cost index funds. These are ideal for steady, long-term growth.

• Satellite - 10-20% of your investments in more speculative investments, like individual stocks, thematic or sector funds. These may be capable of higher growth, but they may also be more volatile.

Many of Kernel’s index funds make ideal core investments, while all individual shares and many of the ETFs in Kernel Shares & ETFs can make great satellite investments.

Read more about core-satellite investing.

Our hypothetical investor is interested in tilting towards ESG, favours tech and still wants to be exposed to the NZ markets. However, they’re also interested in adding a mix of individual shares.

Their portfolio could be built using Kernel Funds and Shares & ETFs as follows:

• 75% Global ESG (Already has 50% exposure to US)

• 5% Global Property (75% US + NZD Hedged)

• 5% NZ 50 ESG (NZ Investments + ESG filter)

In this example, the core makes up 85% of total investments, it features exposure to global, US and NZ markets, plus an ESG tilt.

• 5% Adobe

• 3% Visa

• 2% Nvidia

• 5% iShares Core S&P Mid-Cap ETF

The above portfolio is on the volatile side, particularly with such a relatively high allocation to individual shares via Kernel Shares & ETFs. For that reason, this investor may want to have an investment horizon of 5-10+ years so that they can ride out any volatility.

Read more about investment horizons.

Kernel makes buying US shares and ETFs easier and fairer, which means it’s the ideal tool for most Kiwi investors. Here are the benefits in a nutshell:

• Buy, sell and hold in NZD: Most other platforms require you to add to your wallet in NZD, then buy, sell, and track investments in USD. It’s all in NZD in Kernel Shares & ETFs.

• Low transparent fees: fees for buying and selling US shares are notoriously high, and often confusing. Kernel Share’s & ETF fees are low and transparent so you’ll know you’re getting a fair deal. You can learn more here.

• Everything is in the Kernel platform: Kernel’s online platform includes all the financial products you need to build a balanced portfolio. That means you can buy, sell, and track the value of shares, indexes, ETFs, managed funds and Kiwisaver, all via one intuitive interface and easy to use wallet (no need to remember half a dozen passwords).

• Select list of investment options: Kernel has done the legwork for you, by selecting a curated range of the US’s biggest companies and ETFs by leading fund managers. No need to look through tens of thousands of stocks and ETFs.

Kernel is a great place to start building a balanced portfolio, including all the investments you need to grow your wealth. With Kernel Shares & ETFs and Kernel Funds, you can build your core and satellite investments, then track their growth in NZD, all in one easy-to-use, transparently priced platform.