Smart US 500 ETF Reports $963 Million Fund Size with 14.14 Percent Five-Year Return
The Smart US 500 ETF reported a near-billion-dollar fund size with a 5-year average annual return of 14.14% after fees and tax, maintaining a high-risk profile and low management fees of 0.34%.
- Fund value approaches $963 million as of March 2026
- Five-year average annual return stands at 14.14% post fees and tax
- Risk rating remains high at 6 out of 7, reflecting volatility
- Management fees total 0.34% per annum
- Investment almost entirely in US equities via Vanguard S&P 500 ETF
Robust Returns Backed by US Market Exposure
The Smart US 500 ETF (NZX:USF) continues to track the S&P 500 Index closely, delivering a five-year average annual return of 14.14% after deductions for charges and tax. This performance, while slightly trailing the index’s gross return of 16.06%, underscores the fund’s ability to capture substantial growth from the US equity market despite fees and tax impacts.
For the year ending 31 March 2026, the fund returned 13.47% after charges and tax, marginally below the 15.33% market index return, reflecting consistent but slightly muted performance relative to the underlying benchmark.
High Risk Profile Reflects Market Volatility
The fund carries a risk indicator of 6 on a 7-point scale, signalling significant volatility consistent with its near-total allocation to international equities (99.82%). Investors should note this rating is based on five years of historical returns and signals potential for considerable value fluctuations.
Currency exposure remains unhedged, adding another layer of risk tied to exchange rate movements between the New Zealand dollar and US dollar, which could influence returns in either direction.
Fees Remain Competitive at 0.34% Per Annum
Management and administration fees total 0.34% per annum, with the manager’s basic fee accounting for 0.33%. While seemingly modest, these charges can compound over time and slightly dampen net returns compared to the raw index performance.
For example, an investor with $10,000 in the fund would have earned a return of $1,497 before tax and $1,347 after tax for the year, illustrating the tangible impact of fees and taxation on investment outcomes.
Fund Size and Investment Composition
The fund’s total value stands at approximately $962.6 million as of 31 March 2026, reflecting steady investor interest and capital inflows. The portfolio is heavily concentrated in the Vanguard S&P 500 ETF, which comprises 99.82% of net asset value, with a small cash holding of 0.18% in New Zealand dollars.
This concentrated structure provides efficient exposure to the largest 500 US companies but leaves little room for diversification beyond the US equity market.
Leadership Transitions and Governance
Recent management changes include the appointment of Jon Raby as a director five months ago and Lisa Turnbull as CEO six months ago, both bringing fresh perspectives from significant roles in New Zealand’s financial sector. Longstanding figures like Alister John Williams and Stuart Millar continue to steer investment decisions, providing continuity amid these transitions.
These leadership updates may influence strategic direction or operational focus, warranting attention from investors monitoring governance dynamics.
Bottom Line?
While the Smart US 500 ETF offers solid returns aligned with US market growth, its high volatility and unhedged currency exposure require investors to weigh potential swings against long-term gains.
Questions in the middle?
- Will recent leadership changes affect the fund’s strategic approach or risk management?
- How might ongoing US market volatility and currency fluctuations impact future returns?
- Could fee pressures or competitive ETFs influence the fund’s market share or performance?
