Meet Our 4 New Funds – More Choice & Control

For 6 years, Kernel has been disrupting the traditional financial services model to empower everyone to build wealth on their own terms.

This is a never-ending commitment, and with your support, we’ve delivered even more, including 4 new funds that give investors greater control throughout their investment journey.

The Kernel Funds and the Kernel KiwiSaver Plan welcome the following new funds to the line-up:

• Kernel World ex US

• Kernel World ex US (NZD Hedged)

• Kernel Australia 100

• Kernel Conservative fund

The underlying holdings of these funds will all be held directly and managed by Kernel, with the World ex US fund being our largest fund by individual company count held to date, with nearly 1000 constituents.

Each of these funds carries a simple 0.25% p.a. fee. They’ve each been designed to play a distinct role in helping you diversify, manage risk, and grow long-term wealth at low cost. Let’s take a closer look.

The US is home to the most valuable companies in the world, and the value of all US-listed companies is now over $62.8 trillion USD as of 1 July 2025. This means the US stock markets now make up over 70% of most developed equity market indices. 20 years ago, this number was much lower, but multinational tech giants like, Apple, Amazon, Microsoft and NVIDIA have driven huge growth.

The World ex US is a fund that focuses on the other 23 developed markets. This fund can enable you to have clearer control and diversification without being overexposed to the US.

The charts below show the country mix in a developed equities index compared to the same developed market index excluding the US. Instantly, you can see the might of the US with the weight that it makes up in the index.

Equally, the sector mix, which is the type of business activities each listed company operates in, is different. The US has been home to some of the largest technology names of the past century, including many companies whose products you may use every day.

As you can see the S&P500 Fund has a larger skew towards information technology primarily through exposure to the Magnificent Seven. Comparatively, the World ex US fund favours financials and industrials.

Investors may seek to invest using a Total World fund to get broad access across all developed 24 markets. However, investors may face a challenge with this approach.

Combining an S&P 500 fund alongside a Total World fund can make it tricky to know exactly what your combined investment is in, and given the large overlap in the US between these two funds, an investor may be more concentrated than they thought.

Want 70% US? 50%? More? You can fine-tune the mix. You may have started with the S&P 500, now with a single trade you can add your choice of the rest of the developed markets without any concern on overlap. In the same way, add some Emerging Markets.

Equally, if you want exposure to the US but want less, or maybe even more, than a developed index – you can do this! By mixing the S&P 500 fund and the World ex US, you can set exactly the exposure you want to the US market.

For those tax geeks out there (like me), investors may want to take advantage of the FIF de minimis arrangement to buy up to $50k directly of the Vanguard S&P 500 ETF (VOO) through Kernel Shares & ETFs and then complement using the World ex US fund.

This is an exciting addition for Kernel; it is our first hop across the ditch to offer Kernel investors a low fee and tax-efficient way to invest in the Australian stock market.

While Australia and New Zealand have a lot in common, our stock markets couldn’t be more different.

• The ASX has a market cap of AUD 3.24 trillion as at 31 July 2025 boosted by Australia’s Superannuation system, the 4th largest in the world.

• However, the sector mix is very different to NZ

  • ASX focus: Dominated by materials and financial services

  • NZX focus: Utilities, healthcare and property

• Australia is also known for high dividend-paying companies, attractive for income-conscious investors.

For investors, the fund is a new way to access the Australian share market in an efficient, low-fee PIE structure. No need to worry about currency conversion, tax is handled within the fund, and investors can decide how they want to build their portfolio.

Have some short term savings goals? First home purchase getting closer? The Kernel conservative fund sits between our Cash Plus fund and Balanced fund in risk profile, with a 30% allocation to equities.

It gives investors a simple option for their near-term savings goals, while still aiming to generate a return above just sitting it in a bank account.

The Conservative fund targets a mix of 70% fixed income assets, such as cash and bonds, and 30% growth assets.

Returns will fluctuate, but the volatility is aimed to be lower, best suited to investors with a low risk tolerance or a shorter-term need for their money.

Incorporating income assets can be a smart move to smooth out market ups and downs and stabilise your portfolio's performance.

Just be aware that this focus on stability may mean a trade-off in terms of potential long-term returns. Similar to the balanced fund, the income asset portion of this fund is actively managed by our portfolio manager, while the growth portion is invested in Kernl’s index funds.

Below are the corresponding target portfolio weightings across its investments:

• The underlying companies from the S&P 500 and S&P 500 (NZD Hedged) are now being held directly; previously, this was bought via Vanguard’s S&P 500 ETF (VOO).

• The March 2027 & March 2029 target date funds have now decreased in their fund management fees from 0.50% to 0.25% p.a.

• We also conducted a 3-yearly review of the High Growth and Balanced Fund to ensure they are well-positioned for the current macroeconomic environment.