Eight new exchange-traded funds will list on the NZX on Thursday, including ESG international equities funds and two “megatrend” funds that target automation and robotics, and healthcare innovation.

It is part of a partnership with BlackRock.

NZX head of funds management Hugh Stevens said the ESG ETFs were a way for investors and financial advisers to build a “sustainable core” for portfolios. 

They could then flesh out the investment strategy with individual stocks or other funds.

The funds were offered were moving beyond cap-weighted index tracking, he said, and instead offering more sophisticated investment approaches.

Initial expressions of interest had shown strong demand for the thematic funds, particularly in automation.

Stevens said it was clear that advisers and wealth managers could add value for their clients allocating their money to the right types of asset classes and themes within the market – not by stock picking.

“You can be active with passive products.”

ETFs could be used as building blocks for a portfolio, he said, "rather than starting with sand and water".

He said there had been growing interest in ETFs from financial advisers who had traditionally recommended unlisted managed active funds.

Most had used ETFs for international exposure for a long time but were starting to see them as a good, lower cost way of getting access to investment markets locally, too.

Stevens said the listing of eight funds was a big deal for the exchange, which has been under pressure over a lack of new listings.

He said it was pleasing for Smartshares that BlackRock had decided to offer its funds via NZX rather than going direct into the market as a competitor.

Stevens said, once the foreign exchange spreads, international custody and other fees were taken into account, it was many times more expensive to invest in the funds directly through iShares than it would be to use Smartshares funds.