Investing in Shares

Share Swapping 
Investing in shares

Investing in Shares
When you invest in specific shares you have all the risk.  Direct share portfolios need to be well managed.  One advantage of a direct share portfolio for a New Zealand investor is that any capital gains are not taxed if the investor is not deemed to be a trader by the IRD.

A direct share investor needs to access when to buy and sell shares and where the economy is in the business cycle.   

The IRD definition of a trader is quite loose.  Court cases over recent years have indicated that the IRD may deem an investor as a trader if they have traded more than 5-7 shares in the previous 12 months.  It is important to have the correct ownership structure for your direct share portfolio.

Managed funds/unit trusts investing in New Zealand and Australian (top 500 ASX index paying Australian Franking credits) shares give the benefits of no capital gains tax, similar to direct share investments, but the advantages of diversification offered by unit trusts.

For most investors they don't have the time and patience to invest in direct shares, managed funds/unit trusts are the best option.  With managed funds you have the expertise of fund managers who monitor the individual companies that they are investing in.  Your funds are pooled with other investors to give exposure to 30-50 different companies in a particular managed fund.   Managed funds give you the ability to access markets that you would normally not be able to, such as Asia, Emerging market or specific sector or country funds, etc.

diversification and investing in shares

If you do want to have a direct share portfolio then we recommend investing under a company structure.  This way you can segregate your portfolio into 'passive' (minimal share trading) and 'active' (active share trading) portfolios. 

LYFORDS will sell your New Zealand shares for 1% brokerage, all we need is your:
   - Shareholder number and FIN (Faster Identification Number)
   - Funds will be direct credited to your account.

Share Swapping Facility
Lyford Asset Management Limited and LYFORDS Limited have arranged with OnePath (NZ) Ltd, a leading New Zealand Fund Manager, to exchange your shares for units in any of their retail unit trusts and the Private Portfolio Service Master Fund. 
  -  a transaction fee of 0.6% will be deducted which is well below the normal brokerage offered by even discount brokers.
  -  NO entry fee will be charged for shares swapped for units in a unit trust.  This is a major saving as entry fees can be as high as 6%.

Refer also to LYFORDS Portfolio Management Services

Advantages: